Nalaka Godahewa

Nalaka Godahewa is a former Chairman of the Securities Exchange Commission of Sri Lanka. Godahewa's who was then chairman of Sri Lanka Tourism was appointed as SEC Chairman in mid 2012 after two of his predecessors, Indrani Sugathadasa and Thilak Karunaratne, had to resign within 12 months as a result of a stock market crisis during April 2011 to August 2012.[1] According to Bloomberg statistics, within the first few weeks of Godahewa's appointment as SEC head, the market bounced back from world's worst performing stock market status to the third best performing stock market status.[2] This prompted the business newspaper Daily FT to carry a headline "From Bust to Boom".[3] In November 2012 Godahewa presented a three-year roadmap for capital market development in Sri Lanka.[4] which was endorsed by key industry stakeholders as a timely, positive step in the right direction.[5] By January 2014 Godahewa was in a position to publicly claim that "Foundation laid; time for other stakeholders to deliver"[6] The all share price index of the Colombo Stock Exchange (CSE) had reached 7500 and was performing above all regional and global indices when Godahewa announced in January 2015 the vision and strategies for the market capitalization to be 100Bn by 2020[7]

Dr. Nalaka Godahewa
Born (1965-06-07) 7 June 1965
NationalitySri Lankan
OccupationChairman, Securities Exchange Commission (August 2012-January 2015)

Chairman, Sri Lanka Tourism (2010–2012)
Managing Director, Sri Lanka Insurance (2006–2009)

CEO Offshore Operations, MAS Holdings (2002-2005)

Education and Early Career
At University of Moratuwa - With Electronics & Telecommunication Engineering final year batch 1991

A past student of Ananda College, Nalaka Godahewa entered the Engineering faculty of University of Moratuwa in 1986. He began his career quite late having lost two years since completing A/L due to the long backlog in entering universities and two more years due to JVP insurgency in the late 1980s.[8]

He started his career at Unilever Ceylon as a management trainee, and within less than 10 years, Godahewa became the youngest CEO of MAS Holdings, one of Sri Lanka's corporate entities and an exporter of apparel products to international brands such as Victoria's Secret Stores, Nike, Gap and Marks & Spencer.[9] He managed several overseas operations for MAS Holdings in countries such as Vietnam, Madagascar Indonesia and India gaining valuable experience in setting up international joint venture partnerships. With exposure to six different industries, namely FMCG, Telecommunications, Apparel, Insurance, health care, and tourism.[10] He has served both in private sector and public sector.[11]

Godahewa holds a BSc Honours Degree in Electronics and Telecommunication Engineering from the University of Moratuwa and is academically qualified in three different disciplines of management; Engineering, Marketing and Finance. While working at Unilever he read for an MBA from the PIM of University of Sri Jayewardenepura. He was awarded a PhD in Economics from the University of South Australia in 2008 [12] and he was listed in the business school website of the University in 2014 as a high achieving alumni.[13] Godahewa is a Fellow Member of the Chartered Institute of Marketing (UK), a Fellow Member of the Institute of Chartered Management Accountants (UK) and a Member of the Certified Management Accountants ( Australia).[14] His PhD thesis was on ' Market orientation and the performance of Sri Lankan apparel manufacturers in the post MFA environment.[15]

Involving in a National Cause at Sri Lanka Insurance
Presidents Mahinda Rajapaksa's Visit to SLIC in 2009 after the Government Take Over

The year 2009 was a critical year for the insurance company Sri Lanka Insurance corporation.[16] As a result of a Supreme court order the largest insurance company in the country was handed over from private sector to the Government. Customer confidence was falling rapidly and unions were gaining upper hand. This was the time financial institutions across borders were collapsing due to world financial crisis. A crisis at the Sri Lanka Insurance Cooperation would was triggered a chain reaction in Sri Lanka too. Godahewa was appointed as competent authority of Sri Lanka Insurance in June 2009 with the task of handling the company affairs.[17] Subsequently, appointed as the managing Director of Sri Lanka Insurance,[18] Godahewa, restructured the company within a very short period of time and posted some of the best financial results with the revenue growth of over 30%.[19] He was instrumental in launching the new advertising campaign of Sri Lanka Insurance ‘Like Father Like Mother ( Piyekumen, Mawakemen)’ in 2009[20] highlighting the two core strengths of Sri Lanka insurance of having the government protection and private sector type service standards.[21] He also rebranded life and motor insurance products of SLIC making both categories the fastest growing insurance brands in the market.[22] During his tenure as Managing Director, Sri Lanka Insurance made several strategic investments which were also resulted in substantial unrealized capital gains to the company. These investments included buying controlling stakes of NDB Bank, Seylan Bank and Hatton National Bank. Under his leadership Sri Lanka Insurance made history in 2010 by declaring the highest ever bonus of Rs 3 Bn to the life insurance policy holders of SLIC.[23] This helped increasing the brand credibility significantly.[24]

Turning around Apollo Hospitals and rebranding as Lanka Hospitals
With Defense Secretary Gotabaya Rajapaksa and Central Bank Governor Nivad Cabraal at the relaunch of Lanka Hospitals in 2009

Apollo was a private hospital originally set up by an Indian company and subsequently sold to Sri Lanka Insurance. By 2009 the hospital was not doing well. When Sri Lanka Insurance ownership reverted to government then Defense secretary Gotabhaya Rajapaksa was appointed Chairman of the struggling hospital. The original idea was to convert the hospital to a military hospital as it was not financially viable to maintain. Hand in hand with Gotabaya Rajapksa, the Chairman of the SLIC-controlled Apollo hospitals, Godahewa, who was the Managing Director of Sri Lanka Insurance took a series of measures to turn around the company which was rebranded as Lanka Hospitals and became an industry bench mark for service excellence in the health care industry.[25] Considering his contribution towards turning around Lanka Hospitals from loss making company to a highly profitable and one of the most sought after private health care services of the country, the Chairman Gotabaya Rajapaksa invited him to remain on the Board even after he left SLIC to become the Chairman of Sri Lanka Tourism. When Fortis health care of Singapore bought a substantial shareholding of Lanka Hospitals[26] in 2011 LHP board made full use of the expertise of Forties to strengthen the medical standards of the hospital The Sunday Leader.[27] The joint collaboration between the Super Religare Laboratories of Fortis Health Care and Lanka Hospitals in setting up an international standard laboratory network in the country was also a strategic decision that helped the hospitals increasing overall profitability.[28]

Formulating the Sri Lanka Tourism Development Strategy 2011-2016

As the Chairman of Sri Lanka Tourism Dr Nalaka Godahewa was instrumental in developing the Sri Lanka Tourism Development Strategy 2011-2016 which was approved by the Cabinet of Ministers of Sri Lanka[29] It was under his direction that Sri Lanka Tourism started promoting a clear value proposition of the destination being authentic, compact and diverse under the new tagline ‘Refreshingly Sri Lanka, the Wonder of Asia’.[30] He has been commended by key corporate personalities in the country for creating a highly efficient and investor friendly management culture within a government organization and also for his highly strategic and focused approach towards developing tourism in the post war Sri Lanka.[31] In the 2011/12 annual report the Chairman of Aitken Spence Group, Mr Harry Jayewardene, probably one of the most out spoken and highly critical business leader in the country, states "I must commend the one-stop shop now operated by Sri Lanka Tourism for those interested in entering the industry. The new facilitation body is a much needed single point of contact and has clearly eased the processing and coordination complexities faced by investors".[32] Godahewa was invited by UNWTO on several occasions to talk about Sri Lanka Tourism.[33] He also took a special interest in promoting Chinese tourism to Sri Lanka and made a special contribution by bringing to limelight the historical records of the 14th century Chinese Naval Admiral Zheng He who visited Sri Lanka 6 times.[34] In 2012 Godahewa launched a coffee table book named Refreshingly Sri Lanka jointly with the photographer Dilum Alagiyawanna to support the Tourism promotions efforts of the country.[35] However Sri Lanka Tourism Promotions Bureau changed the 'Refreshingly Sri Lanka' tagline immediately following the exit of Godahewa showing sharp differences of opinion within the Ministry. In 2016 UNWTO/PATA included the Sri Lanka Tourism strategy speech presented by Dr Nalaka Godahewa in Guilin China in 2011 in a publication named 'Global Tourism Outlook 2007-2015' which included some of the best country strategy presentations made at UNWTO over the previous 12 years [36]

Disagreements with the hierarchy on tourism promotions strategy

During May 2012, wide publicity was given by Sri Lankan media about a likely dispute between Godahewa the Chairman of Tourism and the Secretary to the Ministry of Economic Development P B Jayasundara when Godahewa suddenly resigned from the three of the four state sector chairmanships he was holding[37] Though both of them denied that the resignations were due to any clash between the Tourism Chairman and the Secretary to the Ministry of Economic Development, industry sources pointed out that there were major differences of opinions between the two top persons in tourism.[38] Godahewa, a PhD holder in marketing, strongly believed that the country requires an aggressive marketing promotions campaign following the first two years of product development after the war ended in 2009. This position was not supported by the Ministry who wanted the tourism organisations to be restructured.[39] Ministry went to the extent of issuing its own press statement when media expressed serious concern about a crisis in tourism administration and Minister Basil Rajapaksa clarified the ministry view point of how country and investment promotions should be handled.[40] However most of the media continued to express the opinion that professionals such as Godahewa should be given a free hand to deliver. Sunday Times Business Editorial on 10 June 2012 observed that Sri Lanka's tourism promotions have got adversely affected due to disputes between officials professionally competent in tourism promotion and marketing, and bureaucrats who have little or no knowledge about the intricacies of destination marketing. It further said "Godahewa's usefulness may have ended in tourism marketing and promotion, as far as the Ministry is concerned. However his skills and competence have not gone unnoticed by the President’ pointing out that SLTDA chairman continues to be a key speaker at most of the international business forums attended by President President Mahinda Rajapaksa himself.[41]

Heading Securities Exchange Commission during one of the most volatile periods
Presenting Capital Market Development Road Map 2012 with Chairman Colombo Stock Exchange Krishan Balendra

Nalaka Godahewa's appointment to SEC as Chairman took place at a time there were a number of controversies surrounding the Colombo Stock Exchange. During the last 12 months proceeding his appointment on 28 August 2012, two chairpersons of SEC had resigned due to public pressure following continuous decline in the overall market performance.[42] Once rated the Asia's second best performing stock market in Asia the CSE had become Asia's worst performing stock market by mid-2012. The SEC chairmanship became vacant on 17 Aug when Former Chairman of the Securities and Exchange Commission Tilak Karunaratne resigned, claiming he had come under pressure from market players being investigated for alleged stock market.[43] On the other hand, active investors pointed out that during Karunratne's tenure the market performance got from bad to worst due to ad hoc decision making and excessive regulations. Same allegation was there for Karunaratne's predecessor Indrani Sugathadasa, during whose short tenure the market crash actually started.[44] Godahewa on the other hand was seen as a more market friendly regulator respected by both public sector and private sector[45] and the market confidence was visible in the immediate turnaround of the market following his appointment.[46] The new regulator assured that all investigations would continue without interruption but promised a more strategic approach for regulation and market development.[47] Following the introduction of a 10-point action plan for market development,[48] the market bounced back once again[49] All Share Price Index (CSEASI) returned to 6500 mark in June 2013, one year after it hit the bottom.[50] In October 2013 Godahewa presented to the public the first year achievents at SEC which demonstrated that the implementation of the capital market development plan was on track.[51] When capital market vision 2020 was launched in January 2015 with a target of achieving US$100 B the market performance had reached a peak with ASPI at 7500 plus and performing better than all regional and global indices.[52] In January 2015, the Colombo Stock Exchange (CSE) was voted the "Most Sustainable Growth Exchange" in Asia, by the subscribers of the CIF Journal of UK, the World Bank, International Monetary Fund (IMF), Pacific Investment Management Company (PIMCO) and Fidelity Investments.[53]

Conviction and Allegations
Ceremonially opening the London Stock Exchange with Sri Lanka High Commissioner to UK Dr Chris Nonis and CEO of LSE in 2014

In December 2015, Dr Nalaka Godahewa was arrested over an alleged financial fraud by the Police Financial Crimes Investigation Division (FCID), established after the change of government in January that year, which had launched an investigation into an over a transfer of 5 million rupees from the SEC, during his tenure.[54] The sum of 5 million rupees was said to have been transferred to the Tharunyata Hetak Organisation for an awareness programme among rural youth on investing in the stock market. However money had been transferred to a third party bank account in the United States as payment for a Hip Hop dance group that performed at the Carlton Super Sevens Rugby Tournament in 2014.[55]

When Dr Nalaka Godahewa was appointed to lead SEC, he was accused by a Sri Lankan News paper of being "A Pawn Of The Stock Market Mafia".[56] It was best answered by market performance which was reported in daily FT under the heading Capital raised via Bourse booms to record Rs. 119.4 b which reported that “ Amount raised in 2013 was up 300% over 2012 and surpasses even the 2010-09 bull run years and active 2011”. It further stated “Most analysts viewed these achievements, along with record raising of debt worth Rs. 68.3 billion and net foreign inflow of Rs. 34.1 billion, as testimony of a major turnaround for the CSE after having been bruised by various allegations in 2011 and 2012.”.[57] By the end of 2014 the market capitalization was up 631% since the end of the war and the annual net foreign inflaw had exceeded Rs 97 Bn leading to a Daily FT cover story under the title “ Capital market gathers momentum” which remarked ” This achievement is commendable since there were many who warned that foreigners would shun the Colombo Stock Market after it was faced with allegations of manipulation among other ills”.[58]

In June 2013 Sri Lankan news paper, Sunday Times, published an article saying that a major investment into the country is under investigation [59] and continued the story for a few weeks indirectly speculating that there is a probe on Dr Godahewa, a government official for facilitating such investment. Responding to the allegations, Krrish Transworks, the foreign Investment company involved, issued a press statement pointing out there has never being any investigation on its investments into SL and all transactions of the company have always been above board.[60] The press release also praised the Sri Lankan government officials for their commitment and transparency and pointed out that the negative publicity with ulterior motives are in fact affecting the confidence of the investors who are looking at Sri Lanka positively.[61] Answering a question from the press, Mahinda Rajapaksa the President of the country, clarified on 30 July 2013, that there has never been any complain or an investigation on matters related to Krrish group [62] This story which was created and sustained over several months by Sunday Times was not endorsed nor supported by any other responsible national news papers except a few politically motivated websites. In January 2014 the news paper acknowledged that there has been a formal complaint to the Press Council by SEC about its lack of media ethics.[63] By January 2017 even the new government, which had investigated the allegations, cleared Krish group and approval was given to proceed with the project and Sunday times it self reported same [64]

Arrest following the change of government in 2015

Nalaka Godahewa was arrested in November 2015 in connection with an alleged misappropriation of funds at the SEC.[65]

References
  1. Daily FT (Print edition: 29 August 2012).Let’s put market back on track, Nalaka tells SEC : retrieved 3 September 2012
  2. Daily Mirror: (print edition 13 September 2012): From worst to near best what really changed:Retrieved 15 September 2012
  3. Daily FT: (Print Edition 14 September): From bust to Boom:Retrieved on 15 September 2012
  4. Daily Mirror (print edition 16 November 2012) : http://www.dailymirror.lk/business/stock/23533-sec-unveils-three-year-roadmap-.html : Retrieved 5 December 2012
  5. You Tube Video: SEC Media Briefing in November 2012: Retrieved on 13 June 2013
  6. Daily Mirror (print edition 13thJanuary 2014) : Foundation laid; time for other stakeholders to deliver: Godahewa; retrieved on 14 January 2014
  7. Daily Ft (print edition 6 January 2015) :Dr Godahewa Shares 2020 vision for sri lankas capital market. Retrieved 10 January 2015
  8. You Tube Video: Dr Nalaka Godahewa talking to MTV about University Days: Retrieved on 13 June 2013
  9. Daily News (Print Edition : 18 March 2008).'Nalaka Godahewa awarded Doctorate'. Retrieved on 2 June 2012
  10. Sunday Island (Print Edition :3 June 2012).'Dr. Godahewa speaks of his experiences in public, private sectors'. Retrieved on 27 May 2012
  11. Daily FT (Print Edition:29 August 2012)KYC! Know Your Chairman : Retrieved 8 September 2012
  12. Daily News (18 March 2008).'Nalaka Godahewa awarded Doctorate'.Retrieved 3 June 2012
  13. University of South Australia Website. High Achieving Alumni of UniSA
  14. SLTDA Website. 'Chairman'. Retrieved on 30 May 2012
  15. University of South Australia: Library Catalogue: ' Market orientation and the performance of Sri Lankan apparel manufacturers in the post MFA environment / Nalaka Harshijeeva Godahewa': Retrieved 10 June 2012
  16. You Tube Video: Nalaka Godahewa explaining past present and future of SLIC at the life congress 2009:Retrieved on 13th on 2013
  17. WebSite.Colombo Page Sri Lankas internet NewsPaper. (10 June 2009). 'A new Competent Authority for Sri Lanka Insurance Corporation'. Retrieved 30 May 2012
  18. Daily News: (Print edition:27 June 2009:' New Directors Appointed' : Retrieved 10 June 2012
  19. The Island Online. 'Dr. Nalaka Godahewa takes over as SLIC Competent Authority'. Retrieved 1 June 2012
  20. You Tube Video: Dr Nalaka Godahewa's impressive presentation introducing new SLIC Life Insurance Advertising campaign:Retrieved on 13 June 2013
  21. Daily News.(Print Edition 26 October 2009).‘Players should focus on innovation, product quality’. Retrieved 4 June 2012
  22. Sunday Observer (print edition: 21 February 2010).'SLI posts remarkable growth in Life Insurance'. Retrieved 5 June 2012
  23. Daily News. (print edition: 4 December 2009).'SLIC bonus Rs 3 b' Retrieved on 22 May 2012
  24. You Tube Video : Introducing Life Insurance Bonus: Retrieved on13th June 2013
  25. Sunday Island. (6 December 2009).'Lanka Hospitals committed to peerless health care'. Retrieved 23 May 2012
  26. Times of India:(online: 5 March 2011): 'Fortis buys 29% in Lanka hospital corp' Retrieved 10 June 2012
  27. Sunday Leader:( Print edition):'Godahewa Merry go round' : retrieved 9 June 2012
  28. Website : sriLankaNews :India’s Fortis Healthcare sets up lab network with Sri Lanka’s Lanka Hospitals' : Retrieved 10 June 2012
  29. Sunday Island (Print Edition : 5 September 2011).'Govt. unveils strategic plan for tourism'. Retrieved 24 May 2012
  30. Travelio.net(11 November 2010).'Sri Lanka Tourism Shines at WTM London'. Retrieved 27 May 2012
  31. You Tube Video: The speech at Tourism Awards 2010: Retrieved on 13 June 2013
  32. Annual Report 2011/12 of Aitken Spence Group: Chairmans Message: 'Aitken Spence PLC Annual Report 2011-2012 ' Retrieved 14 June 2012
  33. Sri Lanka Embassy of Germany (official website) :Sri Lanka Perspective on Green Tourism. Key Note Sppech at UNWTO conference in Thailand.: Retrieved on 15 November 2013
  34. Daily FT (print edition 4 February 2012) : Commemorating Zheng He, the greatest navigator to visit Sri Lanka from China: retrieved on 15 November 2013
  35. Daily Mirror (print edition 4 December 2012): http://www.dailymirror.lk/business/economy/23982-first-ever-tourism-coffee-table-book-launched-.html : retrieved 5 December 2012
  36. Sri Lanka Business Online : The former Sri Lanka Tourism Chairman recognized by WTO /PATA: retrieved on 4th Nov 2016
  37. Daily FT (print edition: 25 May 2012).'Nalaka Godahewa tosses three tourism hats'. Retrieved 6 June 2012
  38. Daily FT. (print edition: 28 May 2012). 'Nalaka’s move a fallout with Treasury Secy?'. Retrieved 1 June 2012
  39. Daily FT. (Print edition: 30 May 2012).'Basil bats for PB' . Retrieved 5 June 2012
  40. Daily FT ( Print edition : 30 May 2012): 'Ministry of Economic Development breaks silence; responds to tourism, BOI issues' : retrieved 2 June 2012
  41. Sunday Times :(print edition : 10 June 2012): ' Tourism Saga Continues' Retrieved 10 June 2012l
  42. Reuters News: Sri Lanka appoints tourism head as new SEC chief h:Retrieved 7 September 2012
  43. Ada Derana : WebSite 17 August 2012: Thilak Karunarate Submits Resignation:Retrieved 8 September 2012
  44. The Island: (Print Edition 15 August 2012): shady investors and crony brokers:Retrieved 8 September 2012
  45. You Tube Video (Godahewa on MTV business chat):Retrieved on 13 June 2013
  46. Daily FT: (Print edition 8 September 2012). Bourse ends week on 5-month high: Retrieved 8 September 2012
  47. Sunday Observer: (Print edition 2 September 2012).SEC chief to proceed with investigations: Retrieved 8 September 2012
  48. Daily FT 23 August 2013):Leading the positive Change in finance:Retrieved on 23 August 2013
  49. Daily Mirror (Print Edition 13 June 2013):sec chief explains capital markets turnaround strategy: Retrieved on 13 June 2013
  50. Daily FT (Print edition 27 May 2013): Bourse eyes ASI surpassing 6500 points level with net inflows reaching Rs 13Bn : Retrieved on 30 May 2013
  51. The Island ( Print edition 14 October 2013) :The past, present and future of the securities market of Sri Lanka * Key Note Address by SEC Chairman Dr Nalaka Godahewa at the ‘Issuer Relations Forum’: Retrieved on 15 November 2013
  52. Daily News (print edition; 6 January 2015) : http://www.dailynews.lk/?q=business/foreign-inflows-positive-territory: Retrieved on 10 January 2015
  53. Dailyness(print edition 2nd jan2015): CSE named most sustainable growth exchange in asia: Retrieved on 2 February 2015
  54. "Former SEC chairman, two others further remanded - Sri Lanka News". Sri Lanka News - Newsfirst | Breaking News and Latest News provider | Political | Sports | International | Business. 14 December 2015. Retrieved 24 March 2018.
  55. "FCID probes alleged transfer of money by former SEC Chairman for "questionable cause" - Sri Lanka News". Sri Lanka News - Newsfirst. 6 December 2015. Retrieved 24 March 2018.
  56. New SEC Chairman – A Pawn Of The “Stock Market Mafia” Retrieved on 15 June
  57. Daily Ft ( print edition:2 Jan 2014) : Capital raised via bourse booms to record 119.4 bn: Retrieved on 23 February 2014
  58. Daily FT(print edition 22 December2014):Capital market gathers momentum:Retrieved on 22 December 2014
  59. Sunday Times(Print edition: 7 July): Top Sri Lankan Official in the Dock over mega Colombo Deal:Retrieved on 30 July
  60. Daily Mirror :(print edition 19 July 2013)Krrish Group denies foul play, cautions negative implications for investment:Retrieved on 1 August 2013
  61. The Island : (Print edition 18 July 2013):Krrish investors shaken by adverse publicity over delay, alleged graft: Retrieved on 31 July 2013
  62. Daily FT :(Print edition 31 July 2013) Krrish deals: No formal complaint yet, anyone can submit – President:Retrieved 31 July 2013
  63. Sunday Times (print edition 12 January 2014): Krrish must complete the project within 3 years or exit: Retrieved on 14 January 2014
  64. Sunday Times ( Print Edition 15th Jan 2017): all-systems-go-for-krrish-square-project-construction : Retrieved 20 Jan 2017
  65. Daily Mirror (Print edition: 14 December)http://www.dailymirror.lk/99335/remanded-ng#sthash.LAm2UyPb.dpuf: Retrieved 14 December 2015
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