Dissa does a U-turn!

• Departing Director General of the SEC issues official statement over his resignation, role playedduring his tenure and future of capital market

Depending on which way one reads it, in an apparent U-turn or perhaps setting the record straight, the Securities and Exchange Commission (SEC) temporary Director General Prof. Harreendra Dissabandara yesterday issued a detailed statement to the press over his pre-announced resignation.

Since news of his resignation broke on Friday, Dissabandara has been extensively quoted in the media saying he found it difficult to uphold his principles with the current set up at the SEC. The phrase “upholding principles” was used by successive former Chairpersons at SEC as well.

The resignation also sparked a fresh round of allegations against the SEC, saying honest professionals were losing confidence, apart from raising continued concerns over integrity at the capital markets regulator. In yesterday’s official press release issued by Prof. Dissabandara, nothing of upholding principles or being upset with the set up figured.

“By mid 2013 I will be completing five years of service at SEC and also my term as Director General. At the end of my tenure as DG of SEC, I have decided to revert to my substantive position in the University and further pursue my academic interests as a Professor in Finance and continue to contribute to the overall capital market development of the country. Accordingly I have submitted my resignation from SEC with effect from 27 May 2013,” Prof. Dissabandara said.

He also says in the communiqué: “During this period the SEC secretariat contributed effectively to achieve the goals set by the SEC commission. We completed almost 90% of all investigations which were pending at the time I took over as the Director General except a few where the Attorney General’s clarification has been sought.”  He also said: “The open door policy of SEC helped the media obtain necessary clarifications.”

Having detailed a host of major achievements during his tenure both as Director Capital Market Education and Training and Director General, Prof. Dissabandara’s statement concluded by saying:  “With all industry stakeholders working together currently implementing a common action plan, I have no doubt that the future of the Sri Lanka’s capital market will be bright and that it will achieve the ambitious targets set out in our capital market development road map.”

Going by the official statement and by issuing same, Prof. Dissabandara, a top academic and a Professor in Finance, is apparently squashing rumours or allegations though sceptics will continue to raise issues of credibility both at individual and organisation level.

Following is the full text of the press release issued by SEC Director General Prof. Hareendra Dissabandara:

“I am proud to have held the Director General’s position of the Securities and Exchange Commission of Sri Lanka (SEC) from 1 September 2012, during which period the SEC unveiled a comprehensive capital market development road map with a clear vision of enhancing its contribution to the national economy.  During this period the SEC secretariat contributed effectively to achieve the goals set by the SEC commission. We completed almost 90% of all investigations which were pending at the time I took over as the Director General except a few where the Attorney General’s clarification has been sought. SEC also successfully lobbied with the government to obtain a number of concessions for the industry from the 2013 budget. The open door policy of SEC helped the media obtain necessary clarifications. A number of public awareness programs initiated during my tenure were well received by the public. The current market stability and the positive upward trend in the market are testimony to our efforts. Foreign investors with a long term view have returned strongly to the market contributing 48% of turnover by February 2013.

“I was seconded to the SEC in 2008 from the University of Sri Jayewardenepura with a specific assignment of setting up the education arm for the SEC. I have been able to not only achieve this task but also contribute in the capacity of Acting Director General from 2 April 2012 to 31st August 2012 and in the capacity of the Director General from 1 September 2013 to date.

“During my tenure at the SEC I was able to formulate a comprehensive education and training scope for the SEC, introduce a qualification framework for the capital market industry with the help of ADB consultants, introduce Registered Investment Advisors Viva voce examination, develop curriculum, materials, books on the capital market, establish an examination system comprising of both manual and computer based testing, introduce new programs such as financial journalist programs, Listed company directors programs etc, provide the necessary leadership to revamp three major websites of the SEC, introduce a research grant programs to encourage capital market research and conduct events such as the Capital Market Education and Training (CMET) Awards Ceremony, Investment Day and investor Days.

“In addition to the position of Director General I simultaneously handled the CMET Division and supervised External Relations and Market Development and Corporate Affairs Divisions.  As the DG I always maintained a balance between regulation and development aspects of the SEC.  

“By mid 2013 I will be completing five years of service at SEC and also my term as Director General. At the end of my tenure as DG of SEC, I have decided to revert to my substantive position in the University and further pursue my academic interests as a Professor in Finance and continue to contribute to the overall capital market development of the country. Accordingly I have submitted my resignation from SEC with effect from 27 May 2013.

“With all industry stakeholders working together currently implementing a common action plan, I have no doubt that the future of the Sri Lanka’s capital market will be bright and that it will achieve the ambitious targets set out in our capital market development road map.”

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

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 months period was actually ending on 28 February and in that sense the letter came just 13 days before the term ended. Subsequently the Commission wrote 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 early 2013 after efforts to find a suitable person for the most important position at SEC went 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 quit notice, Dissabandara would revert to his substantive post from June 2013 unless granted a further extension on the DG post. As per the SEC Act, DG is technically the Chief Executive with 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 twists.

The quit notice of Dissabandara also comes midst an on-going 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 broader development goals of the country.

An off-shoot of the restructuring was the appointment of Director Investigation Dhammika Perera as the Deputy Director General under Dissabandara.