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Questions and Answers

Unauthorized sales by brokers

Question: Account Holder's name M N C S Mirihana, CDS Account No. ASI 7450 20011 V N00. The Broker's office is at the West Tower, World Trade Centre, Echelon Square, Colombo 1.

The above account has Securities stock

1. 7,000 shares of Chevron

2. 500 shares of Asiri

3. 500 shares of Distilleries

The account was opened in 1996 and upto January 2010 she had the above shares. During the month of January 2010 the broker without the knowledge of the account holder, had bought shares such as Kapila Heavy Equipment, Walker and Greg and Lankem Ceylon at high prices in the bull run to a value of more than Rs. 400,000. To settle this he has sold 4,000 shares of CHEVRON at lower price.

The notice of bought and sold not sent by the broker within the required time. They have been sent after one or two weeks after the settlement date. The Account holder telephoned the broker and begged of him not to buy or sell shares as she had to deposit Rs 200,000 to settle the over due and interest. In spite of her appeal the broker continued to buy and sell in her account.

When she informed me, we went over and met the CEO and the Compliance Officer who went through all the bought and sold notes and agreed to settle the account by buying back 4,000 shares of CHEVRON. They also undertook that there will be no more buying or selling as they will change the broker.

Again in March 2010, the same broker has bought and sold shares upto the value of Rs 300,000 and we had to settle Rs 280,000. When we met the CEO and Compliance officer again on 8/3/2010 they went through the documents and said that they cannot remove the broker as there is a payment due. We requested for a transfer of the account to Acuity Stockbrokers (Pvt) Ltd but they said they cannot transfer the account unless settled in full.

As we were not satisfied with their reply we made a written complain to the Colombo Stock Exchange.

The CSE gave us a form to be completed which we submitted on 23/7/2010.

The relief we have asked from the CSE are

1. To stop operation of the Account

2. Transfer all the shares to the New Account

3. Damage of Rs 500,000

4. Any other relief that CSE thinks appropriate

I am writing this to the OPA in the interest of all share Account holder where this type of unauthorized sale and purchase by brokers are happening.

P.P.U. Anandasiri Gothatuwa, Angoda

Answer: Sorry we had to delay the publication of your question as your write up was too long.

Also we had to edit it by removing the name of the broker firm and its officers as well as the name of the broker all quoted in your letter. It is not correct for us to publish the names of the offending parties as not proven guilty and we don't know their side of the story.

It is very unusual for a broker to take decision on his own. On the other hand clients or account holders do not complain if there is profit but complain only when there are losses. The bought or sold notice should reach the account holder within a week maximum owing to weekends or holidays.

If immediately a serious complaint is made to the Compliance Officer or the CEO, they will take action, at least to stop any further transaction. If this does not happen an account holder should immediately make a written complain to AGM-Regulatory Affairs Colombo Stock Exchange, Level 4, West Tower, World Trade Centre, Echelon Square, Colombo 01.

In the first instance itself you should have handed over a written complain to the CEO and a copy to the Manager Regulatory Affairs of the CSE. Alternatively after your first meeting with the CEO, you should have sent in writing your complaint and their undertaking to sort it out. As it may be difficult to get their commitment in writing, Stockbrokers will tend to cover up for their staff, the brokers. Keep us informed of the outcome from the complaint you have made to the CSE.

Why import input disallowed

Question:We would like to get a ruling on this problem as this is a unique transaction by nature which cannot be directly referred to the VAT Act since this transaction has taken place due to the tsunami relief operations and long after the VAT Act has been enacted.

There had been many types of transactions involved with the aftermath of tsunami with NGOs, Foreign Governments, Individuals and other Institutions rushing into donate relief aid etc. where various types of tax relief were introduced in haste such as VAT exemptions, VAT suspensions, VAT deferments much to the ignorance of the Contractors and Suppliers who did not know fully how these systems worked out or operated. Often the procedures were not properly communicated initially and not properly understood.

R Edgar, Colombo 6

Answer: Your question is five pages long on A4 size paper along with the calculation of different scenarios. Your question says - question posed to the Commissioner General of Inland Revenue. (To be published in the Ceylon Daily News in the Question and Answers Column). We do not publish any articles in this Q&A column. We think that you should forward your question directly to the Commissioner General of Inland Revenue if you have not already done so. Your question is too long for publication in our column and it requires specific answer which only the Commissioner General can provide. Even his response may not be acceptable to you resulting in further correspondence to and fro. We regret our inability to answer your question on behalf of the Commissioner General of Inland Revenue.

'B' Card for EPF refund

Question: I couldn't collect my EPF 'B' Card from my previous employer as I went abroad. When I came back I have noticed that the said company was closed down as it was collapsed.

How can I get my EPF B Card, from where?

Please also explain that, does the employee have the right to ask for their B Cards when they resign from the working place?

Hizam

Mohammed-e-mail

Answer: You may go to the Labour Department Office for the area of your previous employment and try to get your "B" card number from them. The employer has to send to the Local Labour Office a copy of the monthly payment of EPF subscription sent to the Central Bank, EPF Department.

From these records at the Labour office you can get the number and make an application for the withdrawals of your EPF. A copy of the "B" card will be available at the EPF office at Narahenpita for their reference at the time of payment but they will not release it to you. If this fails you can contact the "Centre for Skills and Social Development", a voluntary organization at No. 274, Talapathpitiya, Nugegoda. They are specialist in this field and will assist you free of charge Tel. 2320396.

As regards your second question, yes every employee has the right to request for his or her "B" card from the employer when he or she ceases to be employed in that place or on resignation. You can take this "B" card and continue with it with your next employer in Sri Lanka (not overseas).

Identifying ownership of land

Question: There is an abandoned plot of land in extend 4.5 perches, overgrown with weeds etc. adjoining my land in Wattala.

The original plan before portioning the area is available and on my checking up the records etc. at the Pradesheeya Sabha only the previous owner's details are available as the necessary transfer of the present owner has not been effected.

Can you please assist and enlighten me as to what steps I should take to find the present owner as I am not aware of the Attorney who attended to the last transfer etc.

Your able advice would be greatly appreciated. I recall having written to you earlier last year but there was no response, hence this note.

T. John, Wattala

Answer: Apart from registering with the Pradesheeya Sabha, there is a requirement to register the land transfer deed with the land registry.

The new owner in the unlikely event of not having registered the ownership with the Land Registry is taking a high risk. We suggest that you contact a lawyer who is very familiar with the Land Registry work and get him to search the Land Registry to trace the new owner of the sub division. If in case the sub division has not been registered even with the land registry, the ownership will be still under the owner of the land prior to the sub division.

Entrance to Medical College from International College

Question: I am an A/Level student in an International College in the English medium with science subjects. After A/Level I think I am unable to get admission in the Government Medical University because I attended in the International School. So I have to seek a foreign country to enter into a Medical University, We are very poor and unable to meet the large amount. My father died when I was in an infant. One of my relatives is spending on my school fees throughout from Nursery upto now. My only desire to become a good doctor and serve our country. Please tell me any possibility to get admission in the Government Medical University in our country. I oblige you to help me to overcome from this matter.

KINI, Colombo

Answer: You have failed to state the most important piece of information. Are you following the Local A/Level or the London A/Level. Most students in International Colleges or schools follow the London A/Level. If in case you are in an International College for the sake of English medium and following the local A/Level that is sitting for the A/Level Examination conducted by Examination Department under the Sri Lankan Ministry of Education. Then you are entitled to admission to the Government Medical College provided you meet the qualifying standard. You have to apply to the University Grants Commission for admission when applications are called for.

You can make further inquiries from the University Admission Department at the UGC on Tel. 2691678, 2692978 or 2673056.

If you are following the London A/Level you cannot obtain admission to any of the Government Universities in Sri Lanka as the regulation stand now. However you may try to obtain admission to a local private Medical College in Malabe.

It is SAITM (South Asian Institute or Technology and Management). You can contact them on Tel. 578442-3 for more information.