Sri Lanka finds more ‘pump and dump’ stock losses at National Savings Bank: Finance Minister

COLOMBO (EconomyNext) – The losses to Sri Lanka’s National Savings Bank from being used to dump pumped up stocks during a bubble that broke in 2011 and 2012 was greater than previously imagined Finance Minister Ravi Karunanayake said.

Karunanayake said NSB had so far lost 1,071 billion rupees from stock in 10 companies bought for 2,645 million rupees, mainly in 2011 and 2012, he said.

The National Savings Bank hit the headlines during the last regime when it bought stock of The Finance Company, a troubled finance company.

"The same people who were involved in selling The Finance Company to NSB appeared to be involved in these deals as well," Karunanayake told reporters.

The stock included Browns, Renuka Holdings and Access, Karunanayake said.

In the case of one stock a 500 million rupee loss had made it.

NSB Chairman Ashwin de Silva would complain the anti-corruption commission on the matter, he said.

"You cannot win on every share, that is for sure, but why do you want to buy stocks that are sure to fall?" Karunayake asked.

During the stock market bubble, fired by low interest rates, which broke in 2011 and 2012, many shares were dumped on state-managed funds.

The Employees Provident Fund came to be known in markets as the ‘buyer of last resort’ as it bought stocks at prices other investors in the market were not buying.
 

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