EPF investments in CSE have lost Rs. 12 b in value alleges Harsha

Friday, 29 June 2012 00:01 -     - {{hitsCtrl.values.hits}}

UNP MP Dr. Harsha De Silva in a statement said yesterday that notwithstanding the almost daily statements by the Employees Provident Fund (EPF) defending its investments in the Colombo Stock Exchange (CSE), violating its own published Investment Guidelines it has now been revealed that the EPF share portfolio has made losses to the tune of a staggering Rs. 12.2 billion.

The figures are from the list of EPF investments in the CSE as at 20 June 2012 tabled by Minister Sarath Amunugama as a partial response to a question raised by Opposition Leader Ranil Wickremesinghe under Standing Order 23(2) raised on 21 June 2012.  

The losses made on just the six stocks listed on the Secondary Board of the CSE in violation of the guideline that investments should be made only on ‘blue chips’ has resulted in a loss of Rs. 2.7 billion or 22.5 per cent of the total loss.

Of this amount, the largest losses are from the investments in LAUGFS, amounting to Rs 1.8 billion, Vallibel One amounting to Rs. 740 million and Lighthouse Hotels amounting to Rs. 87 million.  Some of the other massive losses are from the investments in LOLC of Rs. 1 billion, Browns Rs. 945 million, Ceylon Grain Elevators Rs. 713 million and Galadari Hotels Rs. 470 million.

Besides investigating the governance issues alluded to by the global rating agency S&P in issuing a very high risk rating for the entire banking system of the country, the UNP will continue to push for an independent investigation into the transactions of the entire EPF stock portfolio and thereafter for legal action in the event persons are found to have committed securities fraud. 

“In the meantime we will assert that officials of the EPF Department of the Central Bank be summoned urgently to the Public Accounts Committee of Parliament to answer queries on alleged improper transactions at the CSE over the last two years and general queries for the last six years,” the statement added.