Sri Lanka’s SEC sympathetic towards controversial Citrus Kalpitiya Beach Resort; EGM postponed

Apr 28, 2015 (LBO) – Sri Lanka’s Securities and Exchange Commission has requested the controversial Kalpitiya Beach Resort to postpone the scheduled extraordinary general meeting (EGM) which was supposed to held in May, by another month.

“This was to enable the Company to come up with a precise direction on the future course of action on how the Company proposes to safeguard the minority shareholder interests prejudiced by the delays caused in constructing the resort hotel, Citrus Kalpitiya,” Securities and Exchange Commission (SEC) said in a media release today.
“The SEC made this request from the company after perusing the circular issued to the shareholders of Kalpitiya Beach Resort PLC, in consequence of the above said Directive of the SEC as the SEC was of the opinion that the alternate courses of action stated in the circular to the shareholders lacked specific direction with regard to providing adequate recourse to the minority shareholders in respect of their investment.”

On March 20th, SEC ordered Kalpitiya Beach Resort to call an EGM for not complying with a construction work stated in its prospectus.

In 2011, Kalpitiya Beach Resort raised 283.5 million rupees from an initial public offering stating that the funds will be utilized partly to finance a construction of a resort hotel in Kalpitiya within the stipulated period of twenty four to thirty months.

Even though the company has vowed to start commercial operations of the completed hotel early this year, the SEC at a meeting held on 10th March has expressed ‘grave concerns’ for not constructing a hotel within the stipulated time.
The company has been requested by the SEC that in the event the company is unable to rectify the issues in respect of the construction of the hotel, that it is required to propose a viable alternate scheme to redress the shareholders who have been prejudiced by the failure of the company to carry out its objectives as stated in the Prospectus.

CSE data showed, Citrus Leisure Plc owns 72.17 percent of stake, Kalet Malinie Goonewardene owns 4.83 percent of shares, Capital Trust Holdings has 2.76 percent stake while former Navy Commander Rear Admiral, Wasantha kumara Jayadewa Karannagoda holds 0.69 percent shares.

Board members includes Emilianus Prema Alphonse Cooray (Chairman),Dilith Susantha Jayaweera, Varuni Sonali Fernando Amunugama, Rajinda Seneviratne,,Janesh Manoj Bandara Pilimatalawwe and Suresh Dayanath De Mel.