”The media have done well to expose what has been a web of manipulation by a familiar group of people commonly referred to in the marketplace as “the cowboys”. It is now a public secret that they have made the Stock Market a casino, turning black money into white, buying up company after company and real estate with sheer impunity”
The buyer called it a “strategic initiative”, the seller said it was a “horizontal integration”; all pedantic phraseology, but an opposition MP has come to the more accurate conclusion to describe it as “a sophisticated bank robbery”.
The President has long been faulted for permitting a bitter turf battle to continue between the heads of the Treasury (Ministry of Finance) and the Central Bank, but it seems there is some wisdom in his ‘divide and rule’ policy. Had it not been for the whistle-blowing by the Treasury, this whole episode involving the almost iconic National Savings Bank (please see details on page 1 and in our Business section) would not have come to light. The fingerprints of the Central Bank are all over this shady deal relating to the purchase of shares at an inflated price in a private deal with the money of millions of savings account holders. The trail leads irresistibly to the highest levels of the Central Bank. The self-imposed deafening silence by the Central Bank, which is normally quick to hold news conferences, can be seen, at the least, as dereliction of duty because it is the Central Bank which must monitor these underhand activities.
The media have done well to expose what has been a web of manipulation by a familiar group of people commonly referred to in the marketplace as “the cowboys”. It is now a public secret that they have made the Stock Market a casino, turning black money into white, buying up company after company and real estate with sheer impunity. The deals they were involved in were so hot that a respected public servant resigned her job as the chairperson of the Security and Exchanges Commission (SEC), but the public was not given the benefit of knowing why she quit.
Both the SEC and the Colombo Stock Exchange have been accused of being toothless and spineless in regulating the share market, and the government must know why foreign investors shy away from being an investor in the murky waters of Sri Lanka’s stock exchange.
The NSB fiasco was not just a sophisticated bank robbery, it was daylight robbery. Those involved would not have for a moment thought that the unions would run to the Treasury and complain, and even if they did, they knew jolly well that no harm would come their way. The worst that could happen would be the cancellation of the sordid transaction, and they would get their money back. That is because there is complicity in these crimes by influential personalities in the government.
Of late, the Central Bank’s aggressive interventions, or more to the point, interference into the mainstream banking sector (which stood the test during the 30-year long separatist insurgency), has grown from a whisper into a murmur and now to full blown vitriol. Its ‘agents’ sit on the Boards of Banks and Finance Companies giving directives seemingly emanating from the Central Bank whose tentacles are everywhere. Its role as the ‘Bankers’ Bank’ is replete with contradictions and conflicts of interest.
The NSB’s self-incriminatory statement after its botched attempt to buy into The Finance Company was pathetic, to say the least. They tried to engage in damage control only after the deal was exposed, but the defence was as bad as the offence. They left the vital question, the reason for the inflated price for the shares they purchased, unanswered. One expects the entire incident to blow over, hushed up and dumped in the dustbin of forgotten things very soon. But not only will the bad taste linger, the government’s utter disregard for taking action against those who racket in public funds, especially when they are its political backers or financiers, will be another indictment on its legacy.