The past few blog entries have looked into Monetary Policy being run by the use or more correctly the cynical misuse of the Rs1trillion and growing EPF money of the private sector wage earners of this country. I have explained that the use of their stock holdings and sale of which ONLY to foreigners, was a ploy to get much needed foreign currency to prop up the rupee, but that has failed in that objective.
Now the Rs25billion and growing money raised from these sales can be invested in many ways. They can either be used to buy Treasury Bills, which if interest rates rise further will FALL in value. They could be used to buy shares of the CSE to initiate a rally that is not driven by fundamentals, but again on speculation. They could be used to buy property as a long term investment, much in the way Pension Funds in the UK are some of the largest property owners, both of Farm Land, Commercial Buildings, and Residential Property that is rented.
I ask, do you honestly think the present management considers the long term rate of return for the owners of the EPF namely the workers who contribute to it? Short answer is NO. That is because this fund is not managed professionally and only politically. In the latter method it is open to massive fraud and corruption.
Just as I have stated in the blog a while ago how, the EPF instead of purchasing 1,600,000 shares of Central Finance at Rs800 each from the Govt. owned Sri Lanka Insurance Corporation, bought it a few weeks later at Rs1,200 each from a private individual, who had purchased it at Rs800 only after he had got assurance that EPF would buy it at the enhanced price. It is the same all over again. In that instance EPF was effectively defrauded by billions without investigation, as Govt. appointees and politicians were directly responsible for the fraud.
We hear now that the brokerage from the sales has been spread over all the stock brokers in Sri Lanka. What that does is the retirement fund is paying money to the stock brokers to keep them quiet and not question the ethics of the transaction. That is the way govt. buys silence as only money talks in Sri Lanka. This tactic is reprehensible as there is a money gravy train in the offing, to say nothing of the speculative gravy train about to be unleashed with insider trading emerging in a huge way when this money is reinvested in the stock market to buy undervalued shares.
I am willing to bet that the insiders, that is politicians and their corrupt henchmen will be now informed of the shares the EPF will buy. They will then purchase these shares on their own account, and then sell it within a matter of days to the EPF with a premium of say 25% profit for a few days work. There will be NO action taken by the SEC on them and again the retirees savings are used to make the fat cats of the Govt. brigade more wealthy and loyal to them. Remember I said money talks. It is easy then for them to share the spoils with the Politicians and there is only one set that benefit in the end. There is no word for this other than treachery of the first order, the worst form of crime that is committed against a state.
So the people are fooled yet again by the traitors who run this country into believing that their interests are preserved. It is interesting how these individuals make money at EVERY step in these series of transactions, with the EPF being the loser at each of these steps. The first step no doubt is the price at which these shares were sold to the foreign funds. Kickbacks are in Swiss or numbered accounts overseas so we will never know the extent and amounts involved.
It important that ONLY professionals with complete transparency and ethics of the highest standards are given to manage Sri Lankan’s largest investment fund. Otherwise the people are contributing their earnings every month to a fund that is used by a few a for their own ends, a case of the wage earner monthly paying a tithe to the rulers for ruling them, instead of the rulers being servants of the people.
I sincerely hope that sane citizens of Sri Lanka can reach for an element of common sense and decency to point out the aberration of practice in Sri Lanka, and are able to lucidly explain to the people of the country how their assets are being robbed under their own noses, in a manner of daylight robbery by the very persons who profess to safeguard their country, security, and well being from foreigners and other powerful groups outside this country, when in fact it is the very people making the statements who are committing this crime.
It is time that the people of Sri Lanka know what has been happening in the name of patriotism, by a group of people, who only have their personal interests at the center, using the machinery of the government to spread lies, falsehoods and agitate people over non events, while stealthily robbing the life savings of all who live here. This is done with the connivance of many whose silence is bought.