Vignarajah has his say on proposed Minority Investors Association

Investor and activist K.C. Vignarajah has made his submission on the proposed Minority Investors Association, public consultation on which has been sought by the Securities and Exchange Commission. Here is the text of his submission to the SEC copy of which was released to the media as well.

Consultation paper 21 – ‘Minority Investors Association’ (MIA)
I am pleased to submit my views and the view of some likeminded investors. At the outset, I like to emphasise that the Independent Minority Shareholders (IMS) forming the Association should be truly independent and not be controlled or connected to the Controlling Interest or Related Parties (CI&RP) of the PLCs. The stock market mafia should not be allowed to infiltrate the organisation.

A. The organisation of MIA
* Name: Association of Independent Minority Shareholders (AIMS)

* Private Company limited by guarantee with a sole objective of assisting, representing truly Independent Minority Shareholders (IMS) (Voting and Non-voting) of companies.

* Members will have to be IMS with genuine minority stakes which do not form part of controlling groups or related parties shareholdings and are not controlled, connected or influenced by the controlling interest and related parties (CI&RP).
* The most important aspect would be the members’ commitment to the progress, wellbeing and growth of the company, equity market and the capital market.

* IMS should have a meaningful stake in the equity shareholdings of companies or even significant shareholdings so as to be more committed to the success and good governance of the companies.

Members, office bearers, organisation structure (please see annexure)

* The Association will promote the rights of all Independent Minority Shareholders (IMS), irrespective of whether they are members or not.

* The sub-committees to study the performance of each company in which the membership is interested would be selected from the IMS of that company.

Support units

* A research unit to analyse results of companies and liaise with other research organisations which analyse the macro economic situation, fiscal policies and the impact on the stock market and individual companies.

* Legal support unit consisting of concerned and committed lawyers who have the interest of justice and fair play to all decent law abiding citizens of Sri Lanka which would strengthen and enhance the spirit of individual choice, free enterprise and the wellbeing of everyone.

Growing the enterprise sector, promoting the stock market and the image of our country

* It is essential that the teams should work towards strengthening the enterprise sector, to SMEs becoming corporate and then onto listing in the CSE. The benefits of all the incentives, subsidies and facilities are fully utilised by the entrepreneurs who in due course should be happy to share the benefits of such enterprise with a larger segment of the people of the country through investing in the CSE.

* The country needs large amounts of foreign investments, direct and indirect, for sustainable rapid economic growth which would establish Sri Lanka as a desired destination for investment, industries, tourism, unique and much sought after herbs, agricultural products, commercial crops and other commodities of high quality.

* Make the ‘Made in Ceylon’ label, and later ‘Made in Sri Lanka’ label, be recognised and acclaimed for highest quality standards: that was the writer’s contribution to brand ‘Ceylon’ and ‘Sri Lanka’ as early as 1965!

* He tries to contribute this in every sphere of activity he is involved in. The good governance and best treatment of independent shareholders (local or foreign) is ideal to propel the image of Sri Lanka.

* This would easily pave the way for International recognition, create attractive investment hub and with other desirable planned hubs could achieve the cherish goal of becoming the ‘Wonder of Asia’.

* Impunity and tolerating wrongdoing or exploitation would guarantee corruption, unjust enrichment, manipulation and malpractices in the stock market to create the worst image of Sri Lanka.

Positive outlook
The undersigned predicted at an SEC/CSE forum in Jan 2014 an ASPI of 7,500+8,000 and S&P SL of 4,500+by end 2014, if SEC and CSE play their roles correctly.

* Act to strengthen the roles and performance of the SEC in fulfilling its responsibilities to the shareholders of PLCs, the investing public, and the country’s public at large.

* The CSE has popularly been referred to as a ‘Club of Stockbrokers’. Conflicts of Interest (CoI) galore and many IMS have serious complaints about the stockbrokers and the CSE as their CoI has caused severe losses to IMS.

B. Attached is a list of suggested eminent persons to discuss issues relevant to above topics. Please see ‘Annexure B’

C. My fellow IMS and I will be happy to take part and contribute to the above initiative.
Annexure re para B.

B. Eminent experience and concerned persons to be invited to take part in discussions on the subject.
1.Indrani Sugathadasa Weeratunga – Former Chair SEC, Chair IBSL
2.Deshamanya Chari P. de Silva – Former Chair SEC, Aitken Spence LOLC, Lifetime Achievement CA Sri Lanka
3.Deshamanya Ken Balendra – Former Chair SEC, JKH, CCC, South Asia Regional Fund, Sri Lankan of the Year
4.Lion M.J.C. Amarasuriya – Former President Lions International, Chair CCC, ComBank, Planters Association
5.Dinesh Weerakkody – Former Chairman EPF, ComBank
6.Tilak Karunaratne – Former Chair, SEC
Parliament Members to study, discuss and support required Amendments to Companies Act, SEC Act and rules and regulations applicable to capital market.

An all-party inclusive list which may be expanded:
D.E.W. Gunasekera – Chairman COPE, UPFA
Wijeyadasa Rajapakshe – Former Chairman COPE, UNP, eminent lawyer
M.A. Sumantharan – TNA, good governance specialist, eminent lawyer
Anura K. Dissanayake – JVP, good governance/HR activist
Sunil Handunhetti – JVP -do-
Rev. Athuraliye Rathana Thero – JHU/UPFA
Rauff Hakeem – Minister of Justice, SLMC/UPFA
Vasudeva Nanayakkara – NSSP, representing leftist interest
Minister Prof. Tissa Vitarana – LSSP, in welfare of average decent citizens
Dr. Sarath Amunugama – UPFA, eminent economist, Senior Minister International Monetary Cooperation/Deputy Minister of Finance and Planning, with interest in equitable free markets
Dr. Harsha de Silva – UNP
Eran Wickramaratne – UNP
www.ft.lk