The multi-million dollar pump-and-dump manipulations by a business mafia at the Colombo Stock Exchange and the mysterious happenings in the case involving Minister Mervyn Silva’s son, Malaka, are among the latest incidents which show the dangerous trend towards a breakdown in the rule of law – both at macroeconomic and at personal levels. On Friday, [...]


Save us from the law of the jungle


The multi-million dollar pump-and-dump manipulations by a business mafia at the Colombo Stock Exchange and the mysterious happenings in the case involving Minister Mervyn Silva’s son, Malaka, are among the latest incidents which show the dangerous trend towards a breakdown in the rule of law – both at macroeconomic and at personal levels.

On Friday, the Colombo Fort Magistrate, Kanishka Wijeratne, spoke out powerfully and prophetically against what he saw as strange happenings in the case involving Malaka Silva and Army Intelligence Major Chandana Pradeep Susena. The magistrate said he hoped such cases would never be brought before his court again after he personally cross examined the Major while the Colombo Crime Division officers said little and did less.

Magistrate Wijeratne said it was surprising that the Major who had been in the forefront of the battles with the world’s most ruthless terrorists movement was shocked by a relatively small incident that took place at a five-star hotel car park this month. He reminded the Major that he had taken an oath to speak the truth and nothing but the truth and warned that he would face charges if he was found to have violated this oath.

The forthright magistrate ordered the CCD to fully check the video footage of the CCTV cameras in the hotel and give him a full report at the next hearing. It was both inspiring and consoling that Magistrate Wijeratne and many others in the lower and higher courts and the Supreme Court are speaking out strongly to tell politicians and the police that they cannot take the judicial system for a joke or play the fool with the rule of law.

On Tuesday, the Judicial Services Commission issued an unprecedented statement saying there were attempts by various politicians and the state media to damage the credibility of judges by verbally attacking some recent rulings by the judiciary. JSC warned such attacks further undermined the rule of law.

Pro-government propagandist lying, and lying like Goebbels, in the delusion that the lie could be portrayed as the truth, are claiming that the Colombo Stock Exchange during the period from August 10 to September 10 had become the third best performing stock exchange in the world. But many independent economists say the upsurge in the Colombo Stock Exchange was part of the pump-and-dump manipulation which was going on unregulated.

They said hundreds of small investors, apparently unaware of the manipulation, were putting millions into the Stock Exchange. It would not be long before the mafia began the dumping process whereby they would make millions while many of the small investors would be left bankrupt.

The regulatory body for the Stock Exchange is the Securities and Exchange Commission. Early this year its chairperson Indrani Sugathadasa, wife of Presidential Secretary Lalith Weeratunga, resigned saying she was not able to regulate the market. President Mahinda Rajapaksa then appointed the widely respected businessman Thilak Karunaratne as the chairman but after a few months, he also was virtually forced to resign, saying the mafia with political protection at the highest level was preventing him from inquiring into their alleged insider trading. Though scores of small investors are sacrificing millions in a manipulated stock exchange, foreign direct investors are apparently aware of what is happening and many are keeping away or going to other Asian countries such as Vietnam and Bangladesh. This is a huge economic loss for Sri Lanka and if the rule of law is not restored at the Colombo Stock Exchange, it could turn into an economic disaster.

According to the Sunday Times Economic Analyst Dr. Nimal Sandaratne, the message that came out loud and clear at the July economic summit in Colombo was that the economy can grow at a rapid sustained level only by expanding the tradable sector, increasing exports and attracting non-debt creating foreign inflows. For these to be achieved, there should be increased domestic and foreign investment that in turn requires good governance and law and order.

One of the main speakers at the economic summit was Gurcharan Das, Indian author, columnist and management consultant. He said investment would be attractive if there was peace, the rule of law and good governance. Das said investors should feel that nobody was above the law and that good governance mattered more than anything else. “Without law and order or governance, you simply cannot attract foreign investment. With free markets there should be good governance and reforms because with bad governance and no reforms, corruption tends to creep in. If governance is right, the private sector will take off in Sri Lanka,” he said.

Even during the campaign for the September 8 elections to three provincial councils, the rule of law, or specifically election laws, were openly and blatantly violated, mainly by candidates and leaders of the ruling United People’s Freedom Alliance. State property and human resources were abused to benefit candidates of the ruling alliance while the police looked the other way and the Elections Commissioner himself said he was helpless because he had little or no powers to maintain the rule of law, mainly because the 17th Amendment had been abrogated and the 18th Amendment gives absolute powers to the Executive President.
Last week and earlier, the Sunday Times highlighted two other cases of the violation of the rule of law and they involved the powerful Finance Ministry Secretary P.B. Jayasundera, who was at one-time reprimanded by the Supreme Court, fined half a million rupees and removed from office for alleged dishonesty in the privatisation of Lanka Marine Services Limited. But he was reappointed by President Rajapaksa, apparently not sending the right message to foreign investors.

According to the lead story on our front page last month, Mr. Jayasundera had ordered the Customs Chief to disband the Revenue Task Force (RTF) following a standoff between Customs officers and politically-connected businessmen who tried move out with their heavy baggage without paying duty. Last week, our city edition lead story said that the Customs had been ordered by the Treasury to halt investigations into nine dummy companies that imported ethyl alcohol for industrial purposes but sold it surreptitiously to liquor manufacturers.

It appears that VVIPs are drunk with power and most people are losing faith in democracy and free elections. If urgent and effective steps are not taken to restore the rule of law, curb corruption, decriminalise politics, and bring transparency and accountability into governance, Sri Lanka may be on the path to becoming a failed state or dictatorship. With apologies to the wild animals, we must say – save us from the law of the jungle.

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