Stop appeasing, mollycoddling mafia, SEC told New rules inadequate, loopholes benefit crooks

(12. Jan 2014 - CeylonFT)

 

Good governance and minority shareholder rights activists have demanded that the Securities and Exchange Commission (SEC) end its practice of ‘appeasing and mollycoddling white collar criminals’.

 

K.C.Vignarajah, Dilesh Jayantha and Tissa Seneviratne in a strongly worded letter to the SEC said ‘hurried’ release of new rules and directives on related party transactions and public float were very limited and inadequate and the loopholes provided ‘manna from heaven’ to crooked players in the stock exchange.

 

“Appeasing and mollycoddling the white collar criminals, to whom notice has already been given about 3 years ago, after years of agitation by IMS (independent minority shareholders) is totally unacceptable. After permitting this extended period of impunity, a further legalizing aspects of white collar crimes may be ultimate result.  The mafia toasted the new rules.

 

“The principles of natural justice, good corporate governance, unjust enrichment, fraud, misappropriation, criminal breach of trust, manipulation, and concealment of the property of the shareholders, oppression and mis-management have to be punished if Sri Lanka is to become the desired investment hub or the cherished goal of becoming the Wonder of Asia.

 

“Manna from heaven: the worst scenario is the huge bonanza that could be given in the guise of punishment.(suspension from trading or even winning ‘mandatory delisting’ which is the cherished goal of ruthless corporate crooks and fraudsters intent on impoverishing and debilitating the innocent helpless IMS, and the investing public). If the confidence of investors is to ever return, delisting has to be banned, particularly until this transitional period is satisfactorily completed.  The criminal unjust enrichment of CI&RP (Controlling Interest and Related Parties) has to stop.  A powerful wide ranging investigation into patterns of trade over the last 10 years has to be diligently undertaken. The wrongdoers must be punished.  They must compensate the victims out of their personal property and funds without burdening the company.

 

Terminate such management which attempted to defraud the small investor/shareholders (small partners) unlawfully misusing the powers entrusted to them by the shareholders,” they said in the letter to the SEC.

(full letter is quoted below)