SEC DG sent on compulsory leave pending independent probe

Wednesday, 27 August 2025 00:27 - - {{hitsCtrl.values.hits}}

This article has been updated to reflect the correct position as the printed version had some inaccuracies.

Chinthaka Mendis

The Securities and Exchange Commission’s Director General Chinthaka Mendis has been sent on compulsory leave [ending an independent probe.

The move has been ratified by President Anura Kumara Disanayake in his capacity as the Finance Minister on the recommendation of the Commissioners.

The SEC Deputy Director General Tushara Jayaratne has been made the Officer in Charge (OIC) as an interim measure.

SEC Chairman Senior Professor Hareendra Dissabandara was not available for a comment on the reasons for sending the DG on compulsory leave though with pay.

As per the SEC Act, the Minister may on the recommendation of the Commission remove the Director-General appointed from office if his continuation in office is detrimental to the interests of the Commission, provided, that the Commission shall grant an opportunity to the Director-General of being heard, prior to such removal.

Mendis had been issued with a letter citing reasons for the SEC Commissioner’s decision and an inquiry to follow along with an independent probe.

Mendis was Litigation Director at the SEC prior to being appointed as Director General in 2019.

More recently Mendis figured in the controversy over the non-disclosure of relationship between him and CEO-designate of the Colombo Stock Exchange Vindhya Jayasekera.

The latter too hadn’t disclosed in her application to the CSE CEO post that she and Mendis are cousins. The SEC has referred the matter to the Attorney General’s Department for an opinion.

Analysts said that both positions—i.e. the SEC Director General and CSE CEO—require impeccable integrity in the course of ensuring investor trust and the confidence of market participants. (See https://www.ft.lk/front-page/CSE-CEO-appointment-referred-to-AG-s-opinion-over-conflict-of-interest/44-779363).

Some market analysts also faulted Mendis for his vendetta against some select senior brokers. Recently, three brokers who were suspended over alleged misconduct/offenses got a stay order against the SEC. (See https://www.ft.lk/front-page/Three-stockbrokers-secure-stay-order-against-SEC-ban/44-777808). The suspension on the three brokers was lifted but the case is continuing.

There was speculation that SEC Chairman and the Director General were not seeing eye-to-eye of late and were attempting to dislodge one another. Recently, an Opposition MP Dayasiri Jayasekara in Parliament questioned the credibility of the selection and appointment of Prof. Dissabandara as the SEC Chairman.