The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to suspend NatWealth Securities Limited (NWSL) from carrying on the business and activities of a Primary Dealer for a period of six months with effect from 4.30 p.m. on 31.05.2019.
This decision was taken at its meeting held on 30.05.2019, having considered the continuous failure to comply with directions applicable to primary dealers, acting in terms of the Regulations made under the Registered Stocks and Securities Ordinance and the Local Treasury Bills Ordinance.
The CB has taken necessary measures to ensure that this regulatory action does not have a disruptive impact on the Government Securities market. Action will also be taken to facilitate the handling of the interests of the customers and counterparties of NWSL in an orderly manner.
However the previous Cabinet of Ministers decided on Wednesday (August 29) to liquidate the functions of the NatWealth Securities Limited.
A decision has been taken to invest all the funds owned by the Mahapola Higher Education Scholarship Trust Fund, in Government Banks and Central Bank Bonds, liquidating the functions of the company in order to formalize the investments.
The aim was to strengthen the Mahapola Higher Education Scholarship Trust Fund as the company established to invest in it has caused the fund certain disadvantages.
Several issues arose surrounding this company which was established using the resources of funds with such an administrative structure.
The primary issue was the fact that funds of the NatWealth Securities Limited were being diverted to an external company. It was even revealed at the Presidential Commission of Inquiry that thee company suffered serious losses due to the Central Bank bond scam.