The Sunday Leader

The President Pressured Me To Go – Tilak

By Frederica Jansz

Tilak Karunaratne, the former Chairman for the Securities and Exchange Commission says that President Mahinda Rajapaksa as the Minister of Finance brought pressure on him to resign from his post as chairman SEC.

Excerpts of the interview:

FJ: Your predecessor Indrani Sugathadasa was forced out despite being a senior highly regarded public servant and wife of President’s Secretary Lalith Weeratunga. In those circumstances why did you accept the appointment as Chairman of the SEC?

TK: Good question. There were two things. I knew what was happening. I had also been a long term investor in the bourse. And I have also been a keen student of what was happening in the SEC. Indrani, in my view, was at a disadvantage because her husband is Secretary to the President so whatever moves she would probably have also made would embarrass her husband. Therefore she obviously would not want to do certain things which would embarrass Lalith. So she was at a disadvantage. I did not have those disadvantages.
I also got clearances from the president that I would have a free hand. Prior to this he offered me three other posts. One was as Ambassador in Japan which I politely turned down saying I am not a diplomat. I call a spade a spade and I am not suited to be a diplomat. He then asked me to take over as Chairman of the Petroleum Corporation. I said that is a den of rogues and thieves and I don’t want to get involved in that. Again thereafter Lalith called and told me, “HE thinks you’re the best man to go as ambassador to London.” But I told Lalith I have previously also turned down his offer as a diplomat so I don’t want to go anywhere. So I had been turning down all these offers the president had been making to me. Then when he came to Ananda College on my invitation to celebrate its 125th anniversary of the College, that was in November last year, he said “Tilak you have been saying no to everything but now there is a job that is suited for you. I know that you have been an investor in the stock market and you know what is happening there. Don’t say no this time, accept it.” I wanted 48 hours to think about it I consulted my wife and my family and friends. They all advised me against it saying this is a real hot seat. You should just relax and go play your bridge and go to the jungles and spend quality time with your grandchildren. But I said no, I must take up something this is a challenge… and then I said yes to the President.

FJ: You are a well informed man. Did you really believe that you could take on the so called ‘Share Market Mafia’ who are backed by people at the highest levels of this government?

TK: I have a lot of confidence in me. And I thought the President would support me. And that between the two of us we would be able to clean up the bourse and get rid of this mafia. That is what I thought.

FJ: If that is the case why then did you resign. Shouldn’t you have gone ahead with what you were doing despite the pressure for you to resign?

TK: But when the pressure comes from the very person who appoints you. then what alternative do you have?

FJ: It is still not clear who asked you or pressurized you to resign?

TK: Obviously the appointing authority is the Minister of Finance. According to the SEC Act the Chairman and the Commissioners and the Director General are appointed by the Minister of Finance. So the Minister of Finance is the appointing authority. So when the pressure comes from the same quarters, how do I resist it?

FJ: So the President pressured you to resign?

TK: I am saying that the Minister of Finance was the person.

FJ: The President is the Minister of Finance.

TK: Yes.

FJ: So he asked you to take this post and then he pressurized you to resign?

TK: Not directly, where he picked up the phone and said Tilak you have to go. But I got the message through those quarters who are very close to him as well as guys whom I also know quite well.

FJ: If what you have called the ‘Mafia’ accuse you of creating a fear psychosis and over regulating the market?

TK: I can only quote Koshi Mathai on that. He has said this is laughable to say the Colombo Bourse is over regulated. This is one of the least regulated stock markets in the world. I have studied the various jurisdictions specially the markets in the region. We are nowhere near. We are in the 1980s. We were formed in 1986. We are still in the 1990s whereas in actual fact we are in 2012. So compared to the other capital markets we are the least regulated. So this is a joke.
In response to your question on my having created a fear psychosis that is a creation of this Mafia! What is the fear psychosis we have created? In the course of usual investigations we have sent out letters. Not only to the people who are being investigated but to those who we have some information and are connected to these people. For example if inquiring into the activities of a broker, sometimes we may send letters to his client and ask him for an explanation. The worst case scenario would be calling them to record a statement. These letters have been going out since 2004. The letter is standard. They are sent under the various sections of the Act quoting from chapter and verse… and any failure to respond will be dealt with under this section. Similarly, Income Tax and various government entities do it. Under the various sections penalties apply. So there is nothing wrong with that. The only thing is the number of letters that have been going out is higher. Because these were virtually in cold storage. Initially the commissioners asked the director investigations for a progress report which had not been submitted for the last six months. When I asked why and the other commissioners asked if it was a commission decision he said no, but that he had got orders from another quarter to cease the investigations.

FJ: Who is the Director Investigations? And who gave him such an order?

TK: The Director Investigations is Dhammika Perera. He said he was asked to cease or put a stop to investigations. The order had come from the previous DG Malik Cader.

FJ: Malik Cader asked him to stop the investigations?

TK: That he was asked to cease or put a stop to the investigations. So then the commission – not me – the commission decided, no it should not be so that we must recommence investigations. So when we started investigations we sent out letters so naturally the number of letters we sent out was much higher than before.

FJ: Who exactly is this Mafia? Can you name them?

TK: I don’t want to name them because we don’t have sufficient evidence to take them to courts or to bring a case against them at the moment. Even when the COPE asked me who the mafia was I said I am sorry I cannot name them but I think people who generally deal with the Bourse with the Stock Exchange know very well who they are. There is a very select group of so called high net worth investors. They call themselves that – I don’t call them high net worth investors. They are ruthless – Now when there are 28 brokers – the investors…. these guys who are manipulating it would be certainly less than 10, out of 221,000 accounts in the market. So it is a very minute group. But they are so very powerful.

FJ: Who could have influenced the President to get rid of you? After all he offered you the job. He wanted you there. So who could have pressured him?

TK: Certainly this group. It is very unfortunate the President did not call us and ask for our side of the story.
Even that famous meeting he had with selected investors and the brokers and Chairman and Commissioners of SEC and Chairman and Directors of the Colombo Stock Exchange. The way it was arranged… first the brokers were called in and they occupied the centre table… on one side of the President was Gitanjana Gunawardena, Deputy Minister of Finance and Planning, then Sajin Vaas Gunewardena and myself … I had to call Krishan Balendra Chairman CSE (he was looking for a seat) and got him seated next to me – my commissioners and his directors were looking for seats.
They were all over the place. The brokers were occupying the main table! And then the President asked Dilith (Jayaweera) to make a presentation. So it was very unfair because only one side of the story was given.

FJ: What is your advice to the hundreds of small retail investors who invest in the market?

TK: The first thing is the selection of a broker. Anyway you have to go through a broker despite now being able to do internet trading we are still not very well informed. We don’t know what is happening in the stock market.
It is not like betting on a horse. You have to study it. So first thing is to select a good broker. And then study published regular research on previous stocks and not take the broker’s advice as the gospel truth.
Do your own research. But a small time investor does not have the capability to do that. The other thing is he should not put all his eggs in one basket. Like in the Golden Key case – like those with only one million rupees. Recently, I had a couple who came to me – they had an infant child too – they came to me and said Sir, I have only one million rupees – money he had got as dowry.
So he discussed with the wife and invested in the Stock Market. And it went up to three million with the pumping up. Then he wanted to exit. But his broker had said no. Don’t exit it is going up further hang on. So he waited. Now it has gone down to 3 ½ lakhs. This man complained to me and I am finding the Broker at fault but I cannot act against him. He asked me to help. We looked at all the possibilities but there was nothing very much we could do.
There are so many complaints like this against brokers. There are files and files full of complaints. So my advice is don’t put all your eggs in one basket. Use 25% of your investment in the Stock Market – Also, go through a unit trust rather than a stock broker – a unit trust would give you a fixed return though it may not be the best return you can get but at least your investment will be safe – your investment can get wiped out here. So the choice is entirely upto the ignorant retail investor but he must act prudently.

FJ: The criticism from the other quarters is that both you and Indrani Sugathdasa were unsuited for this position.

TK: I don’t know why they are saying so. If you look at the London Stock Exchange is presently headed by a Chemical Engineer. Who retired as director of British Petroleum. He is not the regulator he is the promoter.
As regulator you must have a knowledge of the market which I have and I have been an investor myself for a long time as well as I have been a student of what was happening there.
So I completely reject that accusation. I am not qualified to speak about Indrani Sugathdasa – but even in her case she is a very experienced administrator and the learning curve was quite steep for her. But within three months or so she learnt a fair amount. I think what they mean by not suitable was that we both stood up to them and they were not able to control us and dominate us.
That is the suitability they are talking about. They want a very weak regulator and a very weak Chairman whom they can control.

30 Comments for “The President Pressured Me To Go – Tilak”

  1. D.G.Dayaratne

    Main disqualification of Mrs S is she is wife of Mr w

    Main qualification of Dr K is he is a politician

    Finance Minister’s decission is correct

    • Roshans

      Then why the hell he appointed first place. What stupid dicision is it.

      • AMAR

        Thilak simply failed…! By knowing that he had tremendous challenge, he accepted it.But he was never good enough to over come the challenges rather telling that president pressed him to go.Of cause, if he can not be creative enough to tackle issues, he should go.Just because he is a friend of president, president can not entertain him at everything.He should have find the ways to move forward. Many of us do the same when we failed to achieve something…! It is easy to put all the garbage to one account.If he had the will, he should have find the ways to achieve hi goal. It is simple like that.

        • love2beTRAITOR

          everything in this country is controlled by the ruling family n people who r favorable to them. This country has shut its doors for small investors n small businesses.

  2. Katta Kuvera

    This whole thing stinks. Shame on Asias Miracle. Crooks all over the place.

    • godaya

      very true : /

      • Sahodaraya

        A proper statesman of a country will provide all the backing to make sure ‘the day light robbers’ are fully punished for the sake of the premier financial institution and the country. A crooked statemen will protect the mafia. This pattern is repeated over and over again to protect himself, family, henchman but not the country. Appointing a rapist, underworld king to ministerial positions, not punishing ministers despite hundreds of crimes such as Mervyn, appointing underworld criminals as provincial councillors, having killers/ gross criminals as right hand men such as Amare, all major crimes connected directly to govt. per se- white vans, antique swords etc, appointing astrologers to Bank boards, using billions for joy trips with henchman etc etc …. so is the country led by a statesman… simply no…. its just the godfather of a mafia clan!!!

  3. paul

    Anyone who has held a responsible position in business or politics will know that bosses hate surprises and to hear about problems – for the first time- through the press. Has this man briefed the appointing authority – the Finance Minister- about this issue preferably with a proposal on how to address the issue.

    No wonder the President came to the conclusion that he does not measure up to the job.

    • Rohan

      Very Correct

    • Pacha Epa

      Now I’ve heard it all in the matter of b..d.. excuses for firing a man for trying to do his job!
      I would suggest you take the return route and change back into Saul!

  4. What may come, our hard earned life savings are robbed, by the Mafia group or other manipulators. As Mr.Karunaratne says nothing very much could do. That means their money would not be regained. You lost men all your future!!!!Lets curse the rascals, their legal and illegal wives, children and the generations to come, we curse!

    • Pilot

      Man, no one can rob your hard earned money unless you let them. Stock market stinks. If you learnt it the hard way look elsewhere to invest and move on.

  5. dagobert

    Mr. President… the answers lie with you.
    You have assumed the Presidency to rid the country of S/Market Mafia, Kudu Mafia, Underworld mafias or provide nourishment or to mushroom them.

    You are the Supreme Power in Sri Lanka & you have a duty by the Citizens & the Country.

    If you fail to Act, RETRIBUTION will catch up on you. Then nobody will be able to save you. Not even by the 18th Ammendment.
    If you fear retribution, then ACT now and desisively. Its always better late than never. Then you will be able to enjoy the fruits of the 18th Ammendment.

    get the competent & honest few in to responsible positions now.
    Have you read what TK had to say of the Petroleum Corporation ??

    Did you not know that late R.Premadasa walked into the Harbour when everyone dared not & cleaned up the place.

    • Nutty Pakse

      It all depends if these bosses ands the boss has nuts of their own to stand tall.
      OR, if they are a part of the corrupt and common problem.We all can now guess and have a fair conclusion, going by the current government’s track record..Including the ones at the TOP.

    • Roshans

      Heeee heee. Are you having a dreem. All those promises only to come the power. He is ost crooked person in the world.

    • nanda

      What do you mean get rid of Mafias how can he , as the head of mafias do that? You elected him knowing well who he is now pay for your mistakes. Long live the king of kings

  6. lalm

    highly respect you sir because at least you have back bone to say something which had happen in SEC.

  7. lanka perera

    So the media says the next in line to be Chairman is Godahewa. Isn’t he a director at Divasa Finance which has bought shares on credit amounting to billions. Dilith you won

    • Truepicture

      Don’t slander without knowing the facts. How do you know about credit limits ? Divasa finance has not bought a single share for your information. The group is liquid with 20 years of business. Envy is bad fr yur health :)

  8. C Basnayake

    Only this man was able to name the president . As we all know its president who is the responsible for all the rot in SL, even the opposition scared to to accuse him. I don’t think Sri Lankan people have insight to realize whats happening in SL especially the village folks, there easily fooled.
    Building few roads/ a port considered miracle of Asia while rest of Asia has moved on with reducing public service, income generation, reducing corruption and connecting to internet.

  9. punchinilame

    The Millions recoverd from LTTE hide-outs in May 2009 had to be utilised to
    earn their share. The saying “Poverty is the reward of honest fools” apply.
    The Powers made good via SEC and a Commission of Inquiry is the only
    remedy – which will not take place.
    HE s Immunity is now International – as is being arugued in New York. We
    Lankans are doomed for ever – as long as the 18th amendment remains
    in the Books. As subjects let us wait the Kings verdict, if any!!!!

  10. Truepicture

    Shouldn’t the media chk as to y Malik cader requested dhammika perera to stop investigations ? So going by sheer logic, if that was the case who asked Malik cader to get them stopped ? Then y the hell did indrani sugathadasa resign on principal when Malik was removed ?

    Is the obvious analogy then :
    Mafia supports Malik cader = mrs sugathadasa supports Malik = mafia supports sugathadasa.

  11. Junglee

    Dont touch Colombo brokers . If you think you have the necessary skills and the ability to do your own research and read the market then start investing/ trading with a western market , say London stock exchange or European exchanges as a nonresident through an offshore broker. Alternatively you are better off buying a pack of cards and playing ‘buuruwa’ behind your local tea boutique.

  12. Arunachan

    Hats off to you Mr K for having a backbone and not bowing down to crooks, rogues and thieves. It is far better to resign honourably than to toe the line of these godfosaken rascals.

  13. D.G.Dayaratne

    Main dis qualification of Mrs S is she is wife of Mr w

    Mr W had not not given proper advice to his wife and His ex
    before appointing Mrs S

    Man disqualification of Dr K is is He is a Politician
    He has given priority for his personal ego than the intuition and intention
    of Appointing authority

    Decisions taken by President to pressure them to go are reasonable and correct

  14. Chandadasa

    Tilak I think you are the “Fool”, before you undertake the request of president , yo had to check up the background of the “Boss”. Whole world know he cheated to “Tsunami Funds”, that is not a secreat. A man once cheated to finance, how can be a “God Father” for next time to “Finance”?. He is wise, he wanted some one to place in the chair comfortably, and make “Cat`s Pow Business”. Mrs Sugathadasa(w) is highly educated lady and very early she understood what is going on and resignd before get dirty,then he kept it on you and you foolishly handle it and got burn your good name.
    No any educated man or woman can work with this uneducated clan except another uneducated same grade men or women similer to his family group and henchmen.
    Working with this uneducated group is like a double doctor (Oxan) is working to a village Kasippu Mudalali`s business.
    Finnaly what happend to you is you lost your “Reputation”.Sorry.That is call your foolishness.

    This is a good lesson for the others.

    • King Kekille

      Yes he is. I have no respect for this man. He knew exactly what he was doing. A rogue is always a rogue. He not only robbed tsunami funds but LTTE gold & millions of USD as well. He let all his sidekicks to rob, loot & cheat too. Something went wrong and now Tilak is playing a different card. He is up to something for sure.

  15. Ashjay

    Shows who’s side the executive president is. Where do these ‘net worth’ investors get this much of money? specially the ‘net worth’ investor who made presentation to president. These guys are the front for the powerful VIPs and they share the spoil! This is one crazy country where only crooks thrive.

  16. Gobathaya Gobachakshe

    Isn’t Tilak one of the founders of the neonazi JHU party? Serves you right for starting a racist political establishment….

  17. MF

    There must be strong connection between the Stock Market Mafia and the Decision maker… otherwise why on earth would some one get rid of a good person who was trying to do the right thing….

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