COPE stands by decision to wipe out stock exchange mafia

* Awaits report on 17 cases investigated by the SEC

Parliamentary Committee on Public Enterprises Chairman (COPE) D. E. W. Gunasekera said it was a ‘very sad day’ for the country when Securities and Exchange Commission Chairman Thilak Karunaratne tendered his resignation after the government failed to support the SEC to carry out investigations into market malpractices by an influential group of investors and their crony brokers.

"I was really sorry when I heard that Mr. Karunatne was resigning. He did a wonderful job at the SEC and I personally congratulated him for his work after the SEC was summoned before the COPE earlier this month," Gunasekera told The Island Financial Review yesterday.

"The management at the SEC will undergo a change now, but I stand by the collective decision taken by the COPE after lengthy and careful deliberations and the statements I had made in this regard," he said.

Soon after the COPE meeting with the SEC earlier this month, Gunasekera told The Island Financial Review that he believed a mafia had a strong grip on the Colombo Stock Exchange and that the government should, as a matter of priority, take steps to amend the SEC Act and give the regulator more powers to effectively clamp down on market offences. He also said the SEC should look into EPF investments in the stock exchange so as to safeguard public monies.

"Whoever replaces Karunaratne at the helm of the SEC, we would still expect the report on the 17 ongoing investigations by the end of this month," Gunasekera said yesterday. "The MPs comprising COPE had pushed for the SEC to name those being investigated by the SEC, but as Chairman of COPE, I defended the SEC’s decision to withhold the names until the investigations are over, because this would politicise the entire process and undermine the investigations," he said.

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