UNP National List MP and Chief Economist Dr Harsha de Silva said that he had wanted Central Bank Governor and EPF officials summoned before the Public Accounts Committee in Parliament.
Dr De Silva also said that the Accounts and the Financial statements of the EPF had also been called for by the Public Accounts Committee.
“We will probe all the activities and the manner in which the EPF Funds have been made and if there is corruption or mismanagement, we will be taking legal action,” he said.
Meanwhile, The Janatha Vimukthi Peramuna – led Inter Company Employees Union (ICEU) will stage a massive protest against the decision of the government and the Central Bank to invest Employee Provident Fund monies in the Colombo Stock Exchange.
The Union will also shortly lodge complaints with the Commission to Investigate Allegations of Bribery or Corruption into selected transactions and especially allegations related to purchase of shares of Ceylon Grain Elevators and Laugf Holdings.
This is a very serious situation where the government is gambling with the workers’ hard earned savings and this nonsense must stop, ICEU President Wasantha Samarasinghe charged in an interview with The Island yesterday.
The Trade Union leader also warned that they would also take up with the Commission to Investigate Allegations of Bribery and Corruption how the government manipulated with the shares of Ceylon Grain Elevators which was selling at Rs. 100 to artificially raise it to Rs. 242 million where 5 million shares of the company was sold, but now the share has plummeted Rs. 68 which tantamount to gambling and it was the EPF members who had suffered with those games that the government was playing, he said.
He also charged that the share price of Laugf Holdings was also manipulated where the price which was at Rs. 38 per share at 10 am and increased to Rs. 48 by 11 am where 100,000 shares of the owner/ Chairman W.G.H. Wegapitiya was bought at Rs. 48, but by 2 pm on the same day and then the share dropped to Rs. 40 which was also manipulated.
Meanwhile, UNP National List MP Dr Harsha De Silva said that the stock market needed some injections from the EPF too but had to be subject to certain clauses of the Investment Policy and Professional Code of Conduct for the investment of EPF Funds which had now amounted between 6-7% of the total sum lying with the fund amounting to about one trillion rupees.
He said that the EPF Act which came about in 1958 permitted investments in securities but what was meant by the term securities was not defined at that time. Later, in 2002, the Attorney General had determined that securities could also mean investments in the Colombo Stock Exchange (CSE) but limited only to blue chips. One of the main clauses of the conditions also entailed the conducting of thorough studies which also required the approval of the Monetary Board of the Central Bank as well, he said.
He also explained that one restriction imposed in the EPF investments was in banking shares as there was a conflict of interest with the Central Bank managing and supervising shares of banks while they were bought by the EPF managed by the CB.
He also alleged that the EPF was violating the norms of the investment clauses by investing in the shares of non blue chip companies such as Laugfs which was not even listed on the main board of the Colombo Stock Exchange, but on the Diri Savi Board.
Central Bank Governor Ajit Nivaard Cabraal, when contacted regarding the allegations said that there were various malevolent elements which were attempting to bring the EPF Funds under a private management, and that the EPF as a Fund was well managed.
He also said that the EPF Funds which were invested in the Colombo Stock Exchange were long term funds and that the Fund generated dividends of over 11% which was far higher than that of any bank or other financial institution.
Those were not Hedge Funds but long term funds which had been invested scientifically, he said.
By Ravi Ladduwahetty and Zacki Jabbar