Government attempting to use EPF as a crutch for struggling CSE

COLOMBO (News 1st) -Economic analysts and trade unions have warned that a move to invest the money of the Employees Provident Fund in the Colombo Stock Exchange may jeopardize the fund. The Employees provident fund has been designed to protect the retired life of semi-government and private sector employees. The fund with a membership of 2.6 million at the end of 2017 had grown to a value of Rs. 2,060 billion. 95% of the fund have been invested in state securities while the remaining 4 to 5 % is invested in the stock market. Speaking to News 1st, Former Senior Banker, Rusiripala Thennakoon states that the  5% investment of the EPF has not yielded good results and that it would be a danger to open such a large amount of money to this sector. He continued to say, that in a backdrop where the share market is on a downward path, the Government is attempting to use the fund to prevent the stock market from collapsing. The CSE has recorded significant losses during the past three months. A market analysis of the overall operations of the stock market shows that all share price index had dropped by 3.7% while the S&P SL20 index which monitors the activities of 20 main companies had dropped by 9.3%. During the past few weeks, foreign investors had sold off a large portion of stock purchased in the Sri Lankan market. In just the past week alone foreign investors had sold off shares amounting to a total of Rs 1372 million. It is against such a backdrop that Central bank Governor Indrajith Coomaraswami speaking at the 66th anniversary of the central bank said that funds of the EPF should be invested in the stock market in order to further strengthen the fund. Chairman of the Inter Company Employees Union, Wasantha Samarasinghe stated that during the Rajapaksa regime 9% of the EPF was invested in the CSE, during the 5 year period between 2008 and 2012,  and that the fund suffered a loss of Rs 28bn as a result of this. He further stated that attempts are being made to bring the same proposal that the Rajapaksa family had brought but in a more diplomatic fashion stating that they are obtaining a loan from the Asian Development Bank for policy management and trying to invest the Fund in the stock market. Samarasinghe added that there are several matters of concern, one is that attempts are being made to amend the legal framework present, in order to facilitate the investment of 40% of the fund in the stock market. The Auditor General has pointed out that in 2013 the EPF invested a total of Rs 43.9mn in a company known as the "Information Technological Institute" which was on a downward trend.  By 2015 the EPF's shares were only worth a total of Rs. 3.3mn. In a situation where the company used to invest the money of the Mahapola trust fund was closed down due to the massive losses it caused to the fund,  is it not cause for concern that the funds of the EPF are to be invested in the Stock Market?