Business

EPF to return to stock market; already trading in secondary bond market

The Employees’ Provident Fund (EPF), which withdrew from the Colombo Stock Exchange following the bond scam, looks set to return to the stock market, having already begun trading in the secondary bond market.

“Recently, we started operating in the secondary market in government securities and we are working towards the EPF coming back in to the stock market soon, once all the proprietary work is completed,” said Central Bank of Sri Lanka Governor Dr. Indrajit Coomaraswamy yesterday (28th) at the oration held to mark the 68th anniversary of the Central Bank.

The EPF is managed by the Central Bank and was withdrawn from the stock market following the controversial ‘bond scam’ of 2015.

Dr. Coomaraswamy said that the necessary safeguards are in place now to prevent a repeat of 2015 and ensure absolute transparency in dealings.

“A lot of work has been done on improving processes and procedures. The investment committee now meets on a daily basis. New investment and trading guidelines have been developed. CCTV cameras and voice recordings have been put in place. The segregation between the front, middle and back office has been entrenched.”

A Presidential Commission of Inquiry appointed to investigate the bond scam found that dealers at EPF had been paid millions of rupees by Perpetual Treasuries Limited, a primary dealer in government securities. Perpetual Treasuries, which was owned by the son-in-law of the then Central Bank Governor Arjun Mahendran, was found to have bought bonds at inflated prices at rigged auctions and dumped them on the EPF, an illegal practice known as pump and dump.

Recently it was reported that Asian Development Bank (ADB) had submitted a proposal to the National Labour Advisory Council (NLAC) recommending that the EPF return to the stock market.