Quit Report

Aug 15, 2012 (LBO) – The head of Sri Lanka’s Securities and Exchange Commission is expected to quit this week amid pressure from investors who were being probed for malpractices, a media report said. “I’ll be doing it (quitting) within the course of this week definitely. Definitely before Friday,” SEC chairman Tilak Karunaratne was quoted as saying by Reuters, a news agency.

“It’s better to call it a day rather than fight with these people.”

His predecessor, Indrani Sugathadasa, also resigned amid pressure from some brokers and high net worth investors.

The SEC has probing so-called ‘pump and dump’ fraud where fundamentally weak stocks were driven up and sold to small investors during a stock market bubble fired by lower interest rates and liquidity from margin loans.

However from early 2012 money markets tightened and stocks have fallen amid tighter credit and balance of payments trouble in a typical ‘boom-bust’ seen in pegged exchange rate emerging markets.

Sri Lanka has had problems with rule of law and justice ever since its civil service was gradually destroyed by two constitutions in 1972 and 1978 that undermined and broke an independent civil service commission.