SEC DG gives notice; Chairman says contract anyway due to end in May

The Securities and Exchange Commission’s (SEC) temporary Director General Prof. Hareendra Dissabandara yesterday handed in his resignation with effect from 27 May, whilst Chairman Dr. Nalaka Godahewa said the former’s contract was to expire by end May anyway.

Prof. Dissabandara submitted his letter of resignation yesterday afternoon along with the indicative date, but noted a detailed explanation would follow suit.

A Reuters report quoted Dissabandara as saying “I will resign with effect from May 27 and the resignation is based on my principles and the present set-up.”

“I can’t see a rationale behind his resignation as his term contract is to end on May 31,” SEC Chairman Dr. Nalaka Godahewa was quoted as saying also by Reuters.

The tone of Dissabandara was similar to that of Indrani Sugathadasa and Tilak Karunaratne, both of whom resigned as successive Chairpersons of the SEC leading to widespread controversy amidst allegations by them of market manipulation by group of investors and some claiming over-regulation.

Originally on secondment from the University of Sri Jayawardenapura, Prof. Dissabandara was previously Acting Director General apart from holding the substantive post of Director Capital Market Education and Training since 2008.

Interestingly, a Finance Ministry letter confirming him as the Director General for a period of six months effective from 1 September 2012, had actually reached on 15 February this year. The specified six month period in fact ended on 28 February and in that sense, the letter came just 13 days before the term ended.  

Subsequently, the Commission had written to the Finance Ministry after which his appointment was extended till end May until a suitable person was appointed as the permanent Director General.

The Finance Ministry’s original move of appointing Dissabandara as Director General was in response to SEC Chairman Tilak Karunaratne, prior to his controversial exit in August last year, making a request to confirm the acting appointment. Dissabandara was appointed Acting DG in April 2012 after efforts to find a suitable person for the most important position at the SEC was unsuccessful following the resignation of Malik Cader in November 2011. Dissabandara himself was an applicant among a few others within and outside the SEC.

If there was no notice given, Dissabandara would have reverted to his substantive post from June 2013 unless granted a further extension on the DG post. As per the SEC Act, the DG is technically the Chief Executive with the Chairman and Commissioners playing a non-executive role focused on setting policy. The DG has to function under the general direction of the Commissioners.

In recent years however, the Chairman/Commissioner and DG roles have taken different directions. Dissabandara’s notice also comes amidst an ongoing internal restructuring at the SEC since the assumption of Dr. Nalaka Godahewa as Chairman following the crisis in the capital market, prompting President Mahinda Rajapaksa in his capacity as Finance Minister to urge all stakeholders to ensure stability and resilience in line with the broader development goals of the country.

An offshoot of the restructuring was the appointment of Director Investigation Dammika Perera as the Deputy Director General under Dissabandara.

A Professor in Finance , Dissabandara holds the Ph.D in Finance from the Nagoya University and Chukyo University, Japan (Japanese Government - Monbukagakusho Scholar); a M.Sc. in Management (Finance), University of Sri Jayewardenepura, Sri Lanka in 2000; and B.Sc. in Management (Public) Special Degree (Hons), University of Sri Jayewardenepura in 1993 and his professional qualifications include MCSI, UK (Member of Chartered Institute for Securities & Investments) – 2011; Professional Examination, Institute of Chartered Accountants of Sri Lanka – 1993 and MAAT (Association of Accounting Technicians, Sri Lanka) – 1993.