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Sunday, December 10, 2023

Stock market ‘mafia’ controls the market: Vignarajah

Good governance activist K.C. Vignarajah, now a valiant crusader to save the country’s share market from the grips of manipulators, says the Colombo bourse has a long way to go in getting rid of the ‘Insider Dealings Mafia’ and ensuring a properly-regulated market.

In an interview with the Business Times (BT) where he elaborated on issues confronting the market, he said when bad practices go undetected and the wrong-doers are not punished, investor confidence and the faith in the market fades away. Proper governance of the public listed companies and the market as a whole would enhance investor confidence and do justice to the minority shareholders.

“Rampant insider trading or ‘front running’, market manipulation, suppression and often misleading information, unavailability of material information in a timely manner are some of the factors that have led to the loss of investor confidence,” he said, adding that insider dealings of company directors, public brokers and others with inside knowledge constitute a substantial portion of wrong-doing.

Conflicts of interest are some of the matters in many areas which again erode confidence of investors.
He said deals like NSB-TFC and Watawala Plantations, and EPF-ETF investments are being questioned by eminent analysts and knowledgeable law makers. Mr Vignarajah acknowledged that there are many people who are supportive of his cause to ensure equal opportunities for all in the market, but unfortunately they are reluctant to come to the public arena or make public these concerns.

He said that there are many who are knowledgeable and interested in the health and sustainability of the Colombo Stock Exchange (CSE) and are also aware of the rampant insider trading in CSE. Among them are genuine investors, senior editors, journalists, analysts, stockbrokers, parliamentarians and economists. Lack of effective action to curb errant Controlling Interest shareholders (CI) and creating ‘Shareholder Fatigue’ by stealthily acquiring more shares through related parties (Insider Trading); denial/suppression of real and intangible assets and fair value thereof, are other issues confronting the market.
By Quintus Perera  ST


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