President cancels NSB, TFC deal

President Mahinda Rajapaksa yesterday cancelled the controversial National Savings Bank and The Finance Company deal, Presidential Secretariat sources said last evening.

The NSB had purchased over 7,863,362 shares of The Finance Company, gaining a stake of 13.2 percent for Rs 391 million recently. The deal drew serious attention with stock brokers and bank employees questioning it.Market analyst sources said that the NSB is a public bank and could only go ahead with such a transaction under the direct supervision of the Central Bank. The deal had met all regularity requirements of the Colombo Stock Exchange, but why did the bank pay a 66 per cent of the premium is the question, the market analysts said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51160

Link: http://www.cseleaks.com/2012/05/sri-lanka-cancels-unethical-deal-of.html


Sri Lanka’s top citizen appointed by the people for the rule of the island had cancelled the controversial National Savings Bank’s (NSB) deal pioneered by government appointed NSB Chairman Pradeep Kariyawasam that involved in buying a 13.02% stake of former Ceylinco owned The Finance Company, a deal pioneered by former First Capital Money Broker Ajith Devasurendra’s Taprobane Securities lead by Dinal Wijemanne, top Sri Lankan’ Secretariat sources revealed CSE Leaks.

Accordingly a statement by the Top Sri Lankan’s Office had said the deal had been cancelled in a release at 8 p.m. to public.

Sri Lanka's state owned public deposit rich National Savings Bank bought a 13.02% stake of former Ceylinco owned oldest finance golden house of the island The Finance Company PLC (TFC) on 27 April 2012. After the transaction a filing by Sri Lanka's former Money Broker and Bond marketer Ajith Devasurendra lead Taprobane Securities said.

National Savings Bank had bought 7,863,362 ordinary voting shares of TFC at an average price of Rs.49.74 per share. TFC was the largest contributor to the day's turnover with Rs.394.09 million and a total of 7,982,705 shares traded via 58 trades. Several crossings were done whilst TFC stocks changed hands in parcels of 2,904,983 and 4,237,400 shares at Rs.50 per share and 701,761 shares at Rs.45 per share whilst the sellers were believed to be Taprobane Securities CEO Dinal Wijemanne, Raynnor Silva and former Chairman of failed Tea Company Fern Tea Nirmala Anura Fernando who sold 50,000 shares at Rs.45 per share.

Market Analysts said that after the deal NSB directors had been compelled to cancel the payment of the transaction cost that amounted to over Rs.390 million with the instructions of the Top Sri Lankan who had later scolded the NSB Chairman for carrying out the transaction.

Not knowing the circumstances Sampath Bank PLC the Central Depository System (CDS) settlement custodian of Taprobane Securities had then paid the total sum to main sellers including Dinal Wijemmane and others.

Since NSB had not paid to the transaction after losing the payment of over Rs.390 million Sampath Bank had then cancelled settlement for other share transactions that took place after 27th April behalf of its other brokering clients which Sampath Bank acts as the settlement custodian, according to analysts.

Threads merged.

Who is the Scapegoat?

Finally president had to listen to people voice.Why he cant apply same theory for
other corruptions & misbehavior's.Anyway this is a good decision.

The scope that we should get out of all these, is that the state banking and financial institutions are lacking an appropriate and independent mechanism when it comes to placements of people ' s money. Reversing the NSB - TFC transaction by the Finance Minister who is H E President himself can mis interpret by anti Sri Lanka groups as state interferences.
But questions like :
- ? Why NSB had decided to top a 66% premium saying that TFC has got future earning,
- ? Was the decision made unilaterally and under influences, if YES by whom within the NSB level or beyond,
should be raised and the culprits with bad blood who are answerable for the deal should be punished and downgraded. CSE is experiencing a set back after set back ..

Chanuque wrote:The scope that we should get out of all these, is that the state banking and financial institutions are lacking an appropriate and independent mechanism when it comes to placements of people ' s money. Reversing the NSB - TFC transaction by the Finance Minister who is H E President himself can mis interpret by anti Sri Lanka groups as state interferences.
But questions like :
- ? Why NSB had decided to top a 66% premium saying that TFC has got future earning,
- ? Was the decision made unilaterally and under influences, if YES by whom within the NSB level or beyond,
should be raised and the culprits with bad blood who are answerable for the deal should be punished and downgraded. CSE is experiencing a set back after set back ..

Yes. What HE has done is correct. But it is due to public anger and protest from business circles itself.
If HE wants a clean management at least he should set an example by reducing political appointees. Look at the appointments made to Seylan Bank, Commercial Bank. Now no room for henchmen in government institutions as all vacancies are given. They are looking into listed companies.

Government should not interfere in appointments in listed companies, as least.

wow.. unbelievable!! Sri Lanka Special.. yes it's truly miracle of Asia..

WELL DONE MR PRESIDENT!!!

You should also ask the Chairman of NSB to resign and SEC and CSE to suspend the Brokers involved in this controversial transaction.

This would be a good start to clean up manipulation and corruption from the Colombo Stock Market.

i would like to call this as " ATTAAE COAT "

only way to cancel the deal - he he

Chanuque wrote:The scope that we should get out of all these, is that the state banking and financial institutions are lacking an appropriate and independent mechanism when it comes to placements of people ' s money. Reversing the NSB - TFC transaction by the Finance Minister who is H E President himself can mis interpret by anti Sri Lanka groups as state interferences.
But questions like :
- ? Why NSB had decided to top a 66% premium saying that TFC has got future earning,
- ? Was the decision made unilaterally and under influences, if YES by whom within the NSB level or beyond,
should be raised and the culprits with bad blood who are answerable for the deal should be punished and downgraded. CSE is experiencing a set back after set back ..

This is coz lacking good governance. Many people appointed to run govt.institutons have been seleccted on purely on political reasons without looking the qualifications ,experiance and capabilities of running such institutions. And the other issue is all who appointed to such posts have recieved the support from another one or few people of the circle closed to rullers. Therefore they are under obligation.

Avinash wrote:WELL DONE MR PRESIDENT!!!

You should also ask the Chairman of NSB to resign and SEC and CSE to suspend the Brokers involved in this controversial transaction.

This would be a good start to clean up manipulation and corruption from the Colombo Stock Market.

Yes.. well done mr. Presdient ... this all done by your hencheman with out even bank board approval..So you have to interfere for every thing.When the deal done even NSB chairman say no need for the press confrence also if required can issue a statment only. See how powerfull this politcal appointees... Dear President.. if possible please remove this chairman for this wrong doing to show a example. (but dont give a ambassodar post)

We have to thank our forum members even rose anger again this issue. I saw many topices against this transaction. Because of pepole voice only he has to cancel the deal..
So I will finaly say THANKS OUR FORUM MEMBERS !!!!

sriranga wrote:President Mahinda Rajapaksa yesterday cancelled the controversial National Savings Bank and The Finance Company deal, Presidential Secretariat sources said last evening.

The NSB had purchased over 7,863,362 shares of The Finance Company, gaining a stake of 13.2 percent for Rs 391 million recently. The deal drew serious attention with stock brokers and bank employees questioning it.Market analyst sources said that the NSB is a public bank and could only go ahead with such a transaction under the direct supervision of the Central Bank. The deal had met all regularity requirements of the Colombo Stock Exchange, but why did the bank pay a 66 per cent of the premium is the question, the market analysts said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=51160

Prudent decision from the president after a long time, There should be a formal inqu iry into this and the culprits should be kicked off, if that happens in any chance, that is called "Accountability" which Sri Lanka lacked and suffered a lot due to that.

I totally agree with almost all the comments in this post. My salute to all those who expressed their view points and more importantly to HE the Presidsent who took prompt action to cancell the transaction.

I am of the openion that some more need to be done if HE the President wants to clense the rotten management of these public sector institutions and safeguard his bold decision from anti-Sri Lanka lobysts.

First of all those who are involved in this transaction including the buyer (Lack of due deligence/for misusing public funds/taking undue advantage/mismanagement etc) , the sellers (taking undue advantage from their political connections/unjust enrichment etc), regulaters (for allowing to rob public funds by not acting to cancell the transaction) and brokers should be severly dealt with under the law of Sri Lanka. Action need to be taken against the authorities whose job is to maintain order in the bourse (SEC & CSE) as this daylight robbary was done under their perview with their sanctions and an independent commission need to be appointed to investigate & report similar transactions that took place recently. Then only we could establish much needed confidence in the bourse.

Is it the first time some one paid lot of money to become a debtor ?

K.Haputantri wrote:I totally agree with almost all the comments in this post. My salute to all those who expressed their view points and more importantly to HE the Presidsent who took prompt action to cancell the transaction.

I am of the openion that some more need to be done if HE the President wants to clense the rotten management of these public sector institutions and safeguard his bold decision from anti-Sri Lanka lobysts.

First of all those who are involved in this transaction including the buyer (Lack of due deligence/for misusing public funds/taking undue advantage/mismanagement etc) , the sellers (taking undue advantage from their political connections/unjust enrichment etc), regulaters (for allowing to rob public funds by not acting to cancell the transaction) and brokers should be severly dealt with under the law of Sri Lanka. Action need to be taken against the authorities whose job is to maintain order in the bourse (SEC & CSE) as this daylight robbary was done under their perview with their sanctions and an independent commission need to be appointed to investigate & report similar transactions that took place recently. Then only we could establish much needed confidence in the bourse.

I totally agreed with your valuable comment.
Hats off to our HE President.
He needs to alienate those bad factors surrounding him and destroying the country.
Too late but achievable.
May be this is going to be the first step.
Wait and see.
Thanks all the forum members who participate in various threads to raise our concerns towards this issue.
Salute to the Forum Admin.

This would give one plus mark for the president after longtime.But we need to have a good policy.Then HE do not need to interefere in these matters.Have to have a good team.

rijayasooriya wrote:This would give one plus mark for the president after longtime.But we need to have a good policy.Then HE do not need to interefere in these matters.Have to have a good team.

Listing at least a 5 % stake of state banks and other state controlled ventures like SLIC,CEB,Ports authority,Sri Lankan air lines etc is the solution for this. That will result more transparency and things will be debatable to public and other expertise.I think the government henchme's worst ever nightmare is this. Unfortunately it's not happening, and gov have withdrew the decisions to list some state ventures like SLIC,ITN,SRI LANKAN CATERING etc.

I’m 65:35 against this president’s move.

I personally believe a president of any country should not interfere into any stock market transaction.
Ok we all know that NSB paid a hefty price for TFC share & we all know that this does not look right.

Who bought the TFC shares? Yes its NSB. But remember..a top level NSB officer had to agree with this TFC price tag . Rather cancelling an executed transaction, president/SEC should have brought this officer to justice. These corrupted government officers are a real curse to our country.

Reverse any stock market transaction should not be the best solution to overcome this type of an issue. Whole this scenario reminds me a much softer version of expropriation law.

UKboy wrote:I’m 65:35 against this president’s move.

I personally believe a president of any country should not interfere into any stock market transaction.
Ok we all know that NSB paid a hefty price for TFC share & we all know that this does not look right.

Who bought the TFC shares? Yes its NSB. But remember..a top level NSB officer had to agree with this TFC price tag . Rather cancelling an executed transaction, president/SEC should have brought this officer to justice. These corrupted government officers are a real curse to our country.

Reverse any stock market transaction should not be the best solution to overcome this type of an issue. Whole this scenario reminds me a much softer version of expropriation law.

Very good point brother, but this is Sri Lankan way of doing things. You cancel the transaction & allow the culprit to stay on.

K.Haputantri wrote:

UKboy wrote:I’m 65:35 against this president’s move.

I personally believe a president of any country should not interfere into any stock market transaction.
Ok we all know that NSB paid a hefty price for TFC share & we all know that this does not look right.

Who bought the TFC shares? Yes its NSB. But remember..a top level NSB officer had to agree with this TFC price tag . Rather cancelling an executed transaction, president/SEC should have brought this officer to justice. These corrupted government officers are a real curse to our country.

Reverse any stock market transaction should not be the best solution to overcome this type of an issue. Whole this scenario reminds me a much softer version of expropriation law.

Very good point brother, but this is Sri Lankan way of doing things. You cancel the transaction & allow the culprit to stay on.

May be beginning of new era.
We'll wait and see.

rijayasooriya wrote:This would give one plus mark for the president after longtime.But we need to have a good policy.Then HE do not need to interefere in these matters.Have to have a good team.

Exactly.Vptilak has also mentioned a valid point above. Unless government take early action to establish good governance all development targets would be only dreams and ppl will suffer.

Relation between Chief Justice and deleted Silva has been revealed from this transaction. Good Luck beautiful Hirunika

His Excellency Mr president please take steps to reverse the EPF / LGL and many other dubious transactions executed by EPF. EPF is public money and should be treated as such.

Why it need directions from HE ?

There are responsible institutions to prevent these type of rackets.. but those were crippled by the existing political system and HE. that is why most were against 18th amendment and bold power vested by the constitution on president.

... Sad thing is poor people of this country happy about the involvement of HE..