SECSL gets tough on market manipulators

Files action against two Nawaloka Directors, investment advisor:

Channa Kasturisinghe

MANIPULATION: The Securities and Exchange Commission of Sri Lanka (SECSL) demonstrating its tough stance on acts of market manipulation has filed action against nine persons including some Directors of Nawaloka Hospitals and a senior investment advisor of a leading stockbroker.

The SECSL yesterday announced that it filed action in the Fort, Magistrates Court on November 20 against the offender for committing acts to create a false or misleading appearance of an active share market and the offences of aiding and abetting and conspiracy. These acts have been committed in transactions connected with the shares of Nawaloka Hospitals Limited.

The names of the nine persons are D. A. Samaradiwakara, B. A. Jayasekara, U. H. Dharmadasa, K. M. N. Piyarathne, Michael De Saram

M. T. Ganhewage, L. C. Pallegedera, Mahanama Jayaweera and Jayantha Dharmadasa.

The SECSL in taking this action has exercised the powers conferred upon it by the SECSL Act No. 36 of 1987.

A senior SECSL official told the Daily News that this was a criminal offence and if found guilty the offenders would be subjected to a fine of Rs. 10 million or five years imprisonment or both.

The SECSL after observing unusual price movements of the Nawaloka Hospital shares had decided to investigate if there had been any act of market manipulation.

The official said that such acts have been committed by the offenders since the date Nawaloka was listed on the Colombo Stock Exchange (CSE) in November 2004. Some transactions of the stocks since the day of listing up to March 09, 2005 had been investigated by the SECSL.

According to sources some top Directors of the Company has made use of certain individuals and provide them funds to carry out these suspicious transactions. It is learnt that a senior investment advisor of a leading stock broking company has made use of two of his relatives in committing these acts of market manipulation.

The SECSL with the assistance of the Central Bank's Financial Intelligence Unit has carried out these investigations.

The Director General of the SECSL Channa de Silva last week told the Daily News that there had been serious acts of market manipulations and other malpractices where top company executives and stock brokers are involved and the SECSL would take tough action against them.