Speaking Out

Aug 20, 2012 (LBO) – Sri Lanka Securities Exchange Commission chief Tilak Karunarane has resigned as 17 probes were drawing to a close, a few months after his predecessor also stepped down, a media report said. In a wide ranging interview published in Sri Lanka’s The Nation newspaper, Karunaratne was quoted as saying that he was repeatedly asked to ‘go slow’ on certain probes, but he refused.

Several large investors dubbed the ‘stock market mafia’ had pumped up fundamentally weak stocks and dumped them small investors and state funds at a time when excess liquidity and cheap credit made it possible to get margin loans easily.

Among the probes was a failed attempt to pump and dump stocks in The Finance Company to state-run National Savings Bank, he said.

Karunaratne, a former politician turned businessman donated his entire salary from the SEC to the old boys association of his alma mater, did not use his official car, petrol or even the driver, sources familiar with his activities said.

Almost the entire SEC staff had also written a letter to the President and copied to senior officials, asking him not to resign.

Business chambers and independent activists have expressed shock