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Stock Woes

COLOMBO, Aug 26, 2012 (AFP) - Sri Lanka's stock market, once a darling of investors, has seen its value plummet 26 percent in the past year and now faces a crisis of confidence after its regulator quit in a storm of controversy.
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The tiny bourse became the world's top gainer soon after the country ended decades of ethnic war, but three years later it has imploded amid allegations of corruption.

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Market regulator Tilak Karunaratne quit on August 17, saying he could no longer battle against a "mafia of crooks" preventing probes into insider trading and "pump-and-dump" scams in which investors drive up shares and then sell them.

Allegations of corruption are not new at the $14.5 billion exchange, but it is the first time the regulator had 17 high-profile cases of insider trading and other irregularities on his plate at the same time.


Karunaratne's predecessor, Indrani Sugathadasa, also resigned last year, saying she was unwilling to compromise her "principles".

The euphoria soon after troops crushed Tamil rebels in May 2009 sparked a bull run which has now been replaced by a search for scapegoats for the loss of over billion in value at the Colombo Stock Exchange within six months.

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