Business Times

Next bubble - lending in the stockmarket

Which ‘bank’ gives loans again and again and again to people who didn't pay up loans? Only brokers.

CSE trading floor

They force sell shares and let the same people buy back shares on credit. All the time the SEC is seen dancing to the tune of the brokers. This is why brokers should not be given credit. Don't put the economy of the country in danger by giving into the appeals of the brokers. Ask the brokers why they give credit to people who didn't pay up. That is why we have a T+5 domino effect.

Brokers should not be given the rights to handle credit. These brokers are crafty as foxes. They will show a pretty picture to the SEC and give out credit over credit over credit only thinking about their profits. Credit should be handled with utmost caution. We can see what credit has done to economies in other countries. Learn from them. Don't let more debt get on top of debt. Let the market grow steady. Look what happened to the market in the last few days.

Rumour went around about relaxing credit, market rose up. Look at the counters that went up. If this is how the greedy and foolish retailers gamble with the help of brokers, relaxing credit would play havoc and create complete chaos in the market.The CSE should lower the broker charges to 0.1% as in other stock markets.

This will increase the liquidity and make the market healthy because shares don't have to be pumped up to make a profit then.

Small investor

Dilemma facing state pensioners – open appeal to the President

In view of the dilemma faced by state pensioners who are unable to make ends meet due to sky-rocketing cost of living, increases in prices of vitamins, drugs, medicine and transport costs, I would like to draw the attention of the President to the promises he made to help the state pensioners lead a decent life.

In the Mahinda Chintana, the promises listed in Page 17, under the sub-head “Respected Senior citizens Programme” are:

* I will not allow the Senior Citizens who have devoted their lives for their children and the country, to be lonely.
* Their pensions will be increased in line with the public servants’ salary increases.
* Anomalies in the present pension payments will be rectified and the pension system will be amended to reflect the self-respect of the pensioners. Those senior citizens with visual impairment will be provided with spectacles free of charge.
* A deduction of 50% of the fares as levied by the public sector transport operations will be offered to senior citizens who are above 70 years of age.
* A free railway warrant will be issued once a year to senior citizens to go on a pilgrimage.
* A series of Homes for the Aged will be established for the benefit of destitute senior citizens with the assistance of NGOs and private sector.

The pensioners having faith in the above promises voted to elect Mahinda Rajapakse as President. Then again the President promised to … “take measures to establish that pensions are an honourable and dignified payment in recognition of their valuable contribution to the country.”

On January 14, 2010, the President addressed around 5000 pensioners at Temple Trees where he gave an undertaking that the anomalies arising from the salary increases granted to public servants effective 1st January 2006 will be rectified in the “Next Budget”.

Frustrated over the failure to keep to the promise (in the budget), the pensioners signed an appeal to the President requesting that the 2006 salary anomalies be rectified. Pensioners from all parts of the country signed it. The Pensioners’ Associations thereafter pleaded for a date to hand over the petition to the President, but for over five months the date is being awaited.

Members of Parliament become entitled to a pension after 5 years in Parliament whilst having increases granted to parliamentarians from time to time added to their pensions automatically. To deny state pensioners the same process is discriminatory.

Upali Jayasekera
Vice President.
All Ceylon Pensioners’
Society Ltd

F&G being resurrected

Reference to your news item on Sunday August 3 with regard to F&G managed by Central Bank appointed agents, MBSL, it is heartening to hear that this registered finance company is likely to be resurrected with cash infusion and then re-branded by a well known bank.

However as a long suffering depositor, in this registered company, it is hoped that all senior remnants of the former tainted Ceylinco management will be shown the door. Their maladministration caused a series of disasters for depositors. From an apex of maturity defaults on solicited deposits strengthened by promissory notes, they even issued cheques that “bounced”.

In today’s computerized, monitored banking position, it can only be presumed that such cheques were signed by directors (who hold office to date) in the knowledge there were on funds to meet them. Such action brought the company within the ambit of the criminal law defraud.

The litany continues. Letters of Demand and Upliftment requests ignored, deposits renewed without notice to depositors, and those renewals again suffering maturity default. Registered letters never answered. Following Central Bank directives that finance companies list on the Stock Exchange, depositor consent was solicited for conversation to shares. Non consenting depositors have been penalized by interest payment delays. Enquiries are met with the response by minor staff -“have you given conversion consent”. Hardly subtle pressure.

To cap it all, a notice was exhibited at the entrance to F&G new office at Green Lanka Towers asking for depositors in the Island Finance Company. Checks with the Registrar of Companies revealed that no such company existed. That fraudulent exercise was thwarted by vigilant exposure by your esteemed newspaper.

F&G depositor who wishes the new broom well

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