Sri Lanka appoints tourism head as new SEC chief
COLOMBO (Reuters) - Sri Lanka's government named the head of its tourism board to chair the country's markets regulator, in an appointment likely to please market players but get a more cautious reception from the International Monetary Fund.
Treasury Secretary P.B. Jayasundera said Nalaka Godahewa would join the Securities and Exchange Commission with immediate effect.
The SEC post has been vacant since August 17 when Tilak Karunaratne resigned, claiming he had come under pressure from market participants being investigated for alleged stock market manipulation.
The IMF last week raised concerns over the resignation of Karunaratne, saying that, under his leadership, the SEC had been taking the right steps to ensure its regulations were obeyed.
Godahewa, meanwhile, has been viewed as a market-friendly candidate, and hopes he would succeed to the top regulatory post had boosted the stock market 4.1 percent since Karunaratne's resignation.
Godahewa has worked extensively in the private sector, including as the head of an insurance firm and of the overseas operations of the island's top garment exporter, MAS Holdings.
Godahewa, who will be the third SEC head since December, said he was unaware of the appointment.
Sri Lanka's SEC has been heavily criticised by some market players, who have claimed the stock exchange is over-regulated and blamed this for a 20 percent drop in the index this year.
Karunaratne's predecessor also left amid complaints from brokers that tougher regulations were hurting stock prices.
Analysts and brokers are divided over Karunaratne's resignation with some noting regulations will be difficult to enforce even under a new SEC chief as investors were powerful enough to lobby against any probes.
Karunaratne had been pushing investigations into stock market malpractice, including so-called pump-and-dump deals in which investors are lured into apparently cut-price equities.
(Reporting by Shihar Aneez; Editing by John Stonestreet)
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