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http://lankabusinesstoday.com/index.php?option=com_content&view=article&id=286:environmental-pollution&catid=53:market&Itemid=77
ERI to wait another week to settle its 10 million rupee compound case with SEC.
Sep 03, 2011 (LBT) - The final announcement of the compound case against the Sri Lanka’s Environmental Resources Plc (ERI) will be made after the next regulator’s meeting, market sources said.
“"We are currently aware that there are few more things to settle with the regulator. So, they (Regulator) will make a final announcement, probably after the next week Commission’s meeting.” the sources close to ERI raveled to our web site.
So, they (Regulator) will make a final announcement, probably after the next week Commission’s meeting.” the sources close to ERI raveled to our web site.
Market sources last week said the company and three directors namely Chairman Lalith Heengama, his son and the director Dr. Kosala Heengama and US born G. S. Newsome had been fined close to 10 million rupees by the Sri Lanka Securities and exchange commission .
A company official confirmed that it had settled with the SEC last week, but SEC yet to clarify its position.
Environmental Resources Investment PLC formerly known as Walker & Greig Limited was incorporated in Sri Lanka almost a century ago in the year 1910. It was listed in the Colombo Stock Exchange (CSE) in 1970.
ERI's core business is that of an 'Investment Holding".
ERI became a top ten capitalized company and later bought some troubled firms.
Opposition lawmaker, Harsha De Silva about ERI
Meanwhile Opposition lawmaker, Harsha De Silva, issuing a statement urging the Securities and Exchange Commission to commence legal action against Environment Resources Investment PLC, saying compounding offences only compounded the problem.
"We understand that the Securities and Exchange Commission (SEC) is planning to compound offences of securities fraud by some alleged white-collar criminals who have taken a large number of innocent investors as well as the credibility of the market for a good ride while becoming billionaires themselves. Media reports have begun to circulate that Environmental Resources Investments (ERI) and its Directors have agreed with the SEC to pay an insignificant fine of Rs 10 million and compound a offence related to securities fraud. While the nature of the securities fraud has not been made public it was well known that the SEC was investigating ERI for trading and disclosure related matters.
"While the SEC is yet to make a statement on this matter and acknowledging that this statement is based on media reports we nevertheless believe it is SEC’s duty, as the regulator, to take swift action under the SEC Act to proceed to trial. If ERI has not committed any crime they will be found not guilty but if convicted the perpetrators shall be imprisoned up to five years in addition to relevant fines. It is this lack of tough action by the SEC that is encouraging increased white-collar crime at the Colombo Stock Exchange (CSE) making a mockery of fair-trading by bona fide investors. The status quo does not augur well for the CSE or the economy in the long run. This is particularly so when Sri Lanka is looking for large scale private investments to sustain the post-war development effort.
"In fact, ERI has been under the watch of the investing public and analysts for quite some time for its transactions with hardly any solid information to substantiate its various claims. The unprecedented and sudden rise of its share price from Rs 28 to Rs 275 based inter alia on news of purchasing a company purportedly with access to platinum assets and the subsequent outflow of some USD 18 million to the British Virgin Islands as part payment had been under constant query by market watchers. It has now been revealed that the shares of the said company; Environment Resources Limited (ERL), ironically sounding almost similar to ERI, has been sold to a company who’s ultimate owner is the same entity that ERI originally purchased the shares from. In this background allegations of money laundering and market manipulation continue to be rife. Paradoxically, ERI, boasting of mega profits from global and local investments have just filed a consolidated loss of Rs 23 million for the quarter ending 30 June 2011 as opposed to a Rs 418 million profit for the year ending 31 March 2011.
"Market watchers have also levelled allegations of overseas criminal convictions on at least one of the Directors of ERI bringing in to question the record of the so-called whiz kids behind this company. Allegations of non-disclosure of related party transactions have been made on at least two Directors with regard to a company by the name of Knight Trade that happens to be the second largest shareholder of ERI which is owned by a company named Yenom which coincidentally is owned by the said two Directors of ERI. Questions have been raised if this company, Knight Trade, has the authority to use the official ‘Lion logo’ of Sri Lanka. It is further alleged that ERI uses the identical logo for a stock broking company in Sri Lanka named ‘DNH Financial (Pvt) Ltd’ and for a company named ‘DNQ Financial Private Limited’ based in Dubai to confuse investors and undertake deceptive transactions.
"In an almost unbelievable development, as per the bid book, ERI had agreed to build the 2018 Hambantota Commonwealth Games Village along with Sri Lanka Insurance Corporation and become the largest private sector investor up to date while the SEC was investigating the company for alleged securities fraud and or disclosure offence.
"It seems every time connected persons get caught for fraudulent activity the SEC seem to cut deals with them to leave them out of jail in return for insignificant fines by compounding their cases. The last publicized case of compounding was that of two Directors of Nawaloka Group who paid petty fines of Rs 3.3 million each for conspiring to manipulate the share price of Nawaloka Hospitals.
"Given the widespread allegations of insider dealing and market manipulation at the CSE the SEC must act swiftly and with the full force of the SEC Act to punish these fraudsters to make the CSE a place for bona fide investors; both local and foreign. The fact that the All Share Price Index (ASPI) is up only by a marginal 3.6 percent for the entire year is sufficient proof to show that the CSE is not performing at the level it was expected to, and more need to be done to build investor confidence.
"It is noteworthy to point out that in 2005 ADB wrote in its Sri Lanka: Financial Sector Assessment Report that "compounding of charges is only compounding the problem of insider dealing. The SEC should cease the practice of compounding charges." It is high time the powerful Board of the SEC heeded this advice before the CSE loses its already shaky credibility as a place that honest people can participate in."
Related Link:
http://www.erlanka.com/index.php
http://lankabusinesstoday.com/index.php?option=com_content&view=article&id=286:environmental-pollution&catid=53:market&Itemid=77
ERI to wait another week to settle its 10 million rupee compound case with SEC.
Sep 03, 2011 (LBT) - The final announcement of the compound case against the Sri Lanka’s Environmental Resources Plc (ERI) will be made after the next regulator’s meeting, market sources said.
“"We are currently aware that there are few more things to settle with the regulator. So, they (Regulator) will make a final announcement, probably after the next week Commission’s meeting.” the sources close to ERI raveled to our web site.
So, they (Regulator) will make a final announcement, probably after the next week Commission’s meeting.” the sources close to ERI raveled to our web site.
Market sources last week said the company and three directors namely Chairman Lalith Heengama, his son and the director Dr. Kosala Heengama and US born G. S. Newsome had been fined close to 10 million rupees by the Sri Lanka Securities and exchange commission .
A company official confirmed that it had settled with the SEC last week, but SEC yet to clarify its position.
Environmental Resources Investment PLC formerly known as Walker & Greig Limited was incorporated in Sri Lanka almost a century ago in the year 1910. It was listed in the Colombo Stock Exchange (CSE) in 1970.
ERI's core business is that of an 'Investment Holding".
ERI became a top ten capitalized company and later bought some troubled firms.
Opposition lawmaker, Harsha De Silva about ERI
Meanwhile Opposition lawmaker, Harsha De Silva, issuing a statement urging the Securities and Exchange Commission to commence legal action against Environment Resources Investment PLC, saying compounding offences only compounded the problem.
"We understand that the Securities and Exchange Commission (SEC) is planning to compound offences of securities fraud by some alleged white-collar criminals who have taken a large number of innocent investors as well as the credibility of the market for a good ride while becoming billionaires themselves. Media reports have begun to circulate that Environmental Resources Investments (ERI) and its Directors have agreed with the SEC to pay an insignificant fine of Rs 10 million and compound a offence related to securities fraud. While the nature of the securities fraud has not been made public it was well known that the SEC was investigating ERI for trading and disclosure related matters.
"While the SEC is yet to make a statement on this matter and acknowledging that this statement is based on media reports we nevertheless believe it is SEC’s duty, as the regulator, to take swift action under the SEC Act to proceed to trial. If ERI has not committed any crime they will be found not guilty but if convicted the perpetrators shall be imprisoned up to five years in addition to relevant fines. It is this lack of tough action by the SEC that is encouraging increased white-collar crime at the Colombo Stock Exchange (CSE) making a mockery of fair-trading by bona fide investors. The status quo does not augur well for the CSE or the economy in the long run. This is particularly so when Sri Lanka is looking for large scale private investments to sustain the post-war development effort.
"In fact, ERI has been under the watch of the investing public and analysts for quite some time for its transactions with hardly any solid information to substantiate its various claims. The unprecedented and sudden rise of its share price from Rs 28 to Rs 275 based inter alia on news of purchasing a company purportedly with access to platinum assets and the subsequent outflow of some USD 18 million to the British Virgin Islands as part payment had been under constant query by market watchers. It has now been revealed that the shares of the said company; Environment Resources Limited (ERL), ironically sounding almost similar to ERI, has been sold to a company who’s ultimate owner is the same entity that ERI originally purchased the shares from. In this background allegations of money laundering and market manipulation continue to be rife. Paradoxically, ERI, boasting of mega profits from global and local investments have just filed a consolidated loss of Rs 23 million for the quarter ending 30 June 2011 as opposed to a Rs 418 million profit for the year ending 31 March 2011.
"Market watchers have also levelled allegations of overseas criminal convictions on at least one of the Directors of ERI bringing in to question the record of the so-called whiz kids behind this company. Allegations of non-disclosure of related party transactions have been made on at least two Directors with regard to a company by the name of Knight Trade that happens to be the second largest shareholder of ERI which is owned by a company named Yenom which coincidentally is owned by the said two Directors of ERI. Questions have been raised if this company, Knight Trade, has the authority to use the official ‘Lion logo’ of Sri Lanka. It is further alleged that ERI uses the identical logo for a stock broking company in Sri Lanka named ‘DNH Financial (Pvt) Ltd’ and for a company named ‘DNQ Financial Private Limited’ based in Dubai to confuse investors and undertake deceptive transactions.
"In an almost unbelievable development, as per the bid book, ERI had agreed to build the 2018 Hambantota Commonwealth Games Village along with Sri Lanka Insurance Corporation and become the largest private sector investor up to date while the SEC was investigating the company for alleged securities fraud and or disclosure offence.
"It seems every time connected persons get caught for fraudulent activity the SEC seem to cut deals with them to leave them out of jail in return for insignificant fines by compounding their cases. The last publicized case of compounding was that of two Directors of Nawaloka Group who paid petty fines of Rs 3.3 million each for conspiring to manipulate the share price of Nawaloka Hospitals.
"Given the widespread allegations of insider dealing and market manipulation at the CSE the SEC must act swiftly and with the full force of the SEC Act to punish these fraudsters to make the CSE a place for bona fide investors; both local and foreign. The fact that the All Share Price Index (ASPI) is up only by a marginal 3.6 percent for the entire year is sufficient proof to show that the CSE is not performing at the level it was expected to, and more need to be done to build investor confidence.
"It is noteworthy to point out that in 2005 ADB wrote in its Sri Lanka: Financial Sector Assessment Report that "compounding of charges is only compounding the problem of insider dealing. The SEC should cease the practice of compounding charges." It is high time the powerful Board of the SEC heeded this advice before the CSE loses its already shaky credibility as a place that honest people can participate in."
Related Link:
http://www.erlanka.com/index.php
