8 August 2010 10:47 am
The main opposition UNP warned that the transactions which take place in the stock market outside its fundamentals and investments made by the EPF violating its guidelines will lead to consequences right to the extent of a total economic recession in the country
UNP National list MP Dr. Harsha De Silva told said the sky rocketing boom which the CSC recorded recently was something which was achieved outside basic fundamentals associated with it.
He said the shares prices of some companies which were bankrupt had increased suddenly and added share prices have increased by 300 percent in the case of some such companies. In addition he alleged that investments in some unknown companies have also increased dramatically.
The UNP MP said the 10 percent limit which the government introduced will make the small scale investors to leave the market by selling their shares off because trading of shares of one company will be halted when the share price is increased by 10 percent or reduced by 10 percent.
“The CSE today has turned into a casino,” Dr De Silva said warning that this will lead the country into a total recession.. He made this point by recalling that the collapse of Wall Street led to the total economic recession in the USA.
Coming out with another staggering disclosure, the UNP MP alleged that the EPF which is controlled by the Central Bank(CB) had invested in several banks, violating the investment guidelines established by the CB itself. He explained that the EPF had invested in several private banks including the crisis stricken Seylan Bank violating the investment guide which prevents EPF from investing in banks.
Dr. De Silva charged that there is a serious conflict of interest in this approach as it is the Central Bank which sets interest rates while it is aware of all the inside information of these banks through its monitoring body on financial institutions .
In addition he said the EPF had also invested in a leading Colombo Hotel violating the guideline which says the fund can only invest in a blue-chip companies.
The UNP MP alleged that these steps taken on financial investments are similar to Deputy Minister Mervin Silva’s action of tying a government servant to a tree.