Shaping a future CSE to list eligible SOEs, within President’s jurisdiction

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‘Finance Today’ contacted the Securities and Exchange Commission of Sri Lanka (SEC)’s Immediate Past Chairman, Ranel T Wijesinha seeking his comments on President Ranil Wickremesinghe’s opinion about the State Owned Enterprises (SOEs) listings in the Colombo Stock Exchange (CSE) on Friday at the recent event. Here’s what former SEC Chairman, Wijesinha said: 

“I was away from Colombo for a few days, tending to my agricultural small holdings, hence was unable to attend that particular event organised by the Colombo based Think Tank which I was invited to on Friday, however, when I was alerted to President Wickremesinghe’s comments or rather question with regard to whether the Colombo Stock Exchange is the appropriate medium to list SOE’s, I was not happy. 

Having been associated with him from 1989, when he as Minister of Industries incentivised the capital market with many fiscal and investment incentives, I can identify completely with his concern but yet, would have preferred if he did not say what he said and had engaged the SEC and CSE first. I hope he does so at least now. He has every right to do so.  

The right political personality 

I say this because I am abundantly aware that given his long and deep insight into the SOEs, and demonstrated understanding of the Capital Market, over many decades, I was and remain hopeful that he can well be the apex level political personality, with the knowledge and capability to propel the CSE to the yet unrealised next level, while transitioning eligible SOE’s to an acceptable level of stability, profitability and sustainability. 

His prerogative 

My concern also stemmed from the fact that the privilege, the opportunity, the prerogative is his, to demand the strengthening of what is weak, at the apex level regulator the SEC or its licensee, the CSE, by surfacing deficiencies plugging the holes and bridging the gaps. 

Personal precedent 

He was Prime Minister, when we, post-2014, restored the independence, objectivity, integrity, openness and accessibility, accountability, responsibility, credibility, trust and confidence in the capital market, its apex regulator the SEC and its licensee CSE, from 2015-2019.

 No political interference 

While I cannot comment on the period of my predecessor, between 2015 January and 2018 May, I can say without fear of contradiction from any quarter, and all Commissioners- ten in all will unanimously agree with me that, during the brief 15-18 months that I was Chairman of the SEC between June 2018 to November 2019,(excluding the gap during what I term the October Revolution and constitutional coup) neither he, the then President, nor any member of the Cabinet, directly or indirectly attempted to interfere with our independence. Thus there was no political interference leading to regulatory forbearance. 

We were just and fair, up-to-date and aware, and certainly proactive. We strictured and imposed fines upon Brokers, we fined Board members who did not disclose rating downgrades for the first time in the history of the SEC and filed action against insider traders. We investigated, studied long and hard, and finally did all what we did, based on guidance from the office of the Attorney General and with unanimous approval of a full commission.  

A future that is his to shape 

So, as I said, shaping a future CSE as a medium to list eligible SOEs is well within the jurisdiction of the President and the Government and I am sure all at the SEC, CSE and market participants will fall in line. 

Seek out the flies in the ointment 

Just as he should differentiate between the disruptive, anti-establishment, violent, bad eggs posing off as wholesome participants in the “Aragalaya” and genuine activists, I am sure he can well demand and achieve a weeding out of the bad eggs in the capital market, who bring the SEC and the CSE into disrepute.  

Baby and the bathwater 

In essence, we do not have to throw the baby out with the bathwater. The CSE has good precedent, it is led by persons of experience, maturity and integrity. The CSE as an institution is fighting below its weight class, so let’s not create any parallel or second medium. Let’s leverage the unrealised potential of the CSE. The SEC has a clear role to play. The new SEC Act, which we all helped draft, is now passed. I am confident we can build a better capital market, which earns the trust and credibility of President Wickremesinghe and all stakeholders, on and offshore. I know we can!

By Ranel T Wijesinha