Buckle Tight Regulator to be a Soul in CSE History: No More at Watch Dog’s House on All Souls Day

Sri Lanka’s No.1 Leaks site wants to inform readers exclusively with confirmed sources that with immediate effect Buckle Tight Regulator is out from his seat at the Market Watch Dog’s House. "He has submitted his resignation from office today after a Commission meeting" market source told CSE Leaks.

Investors in Sri Lanka view the ‘Buckle Tight’ as the person who brought in the ‘White Flag Incident’ to Colombo Bourse when he first gave a nod to impose a ‘Price band’ to Colombo’s rising stocks. That time some market analysts were in the opinion that Sri Lanka should follow Hong Kong rule of shooting Gunny Bags with the people who were responsible for leading stock market to a crash by ‘Over-regulation.’

With news out in York Street and Janadhipathi Mawatha and Fourth Floor at World Trade Centre Trading Floor market indices shoot up by 127 points (2%) before 1 p.m. on 2 November 2011.

Sri Lanka’s Buckle Tight Regulator may go home by end of 2011?

After many tight regulations he took to curb investors and brokers from so called manipulations since his appointment in 2010; Sri Lanka’s buckle tight regulator Malik Cader had been asked to leave from his position of Director General (DG) at the Securities and Exchange Commission of Sri Lanka; CSE Leaks learns.

'Accordingly by a special Cabinet paper decision he had been asked to leave his office', reports reveal. “He had asked for more time till 31 December 2011  but he will be removed early as 31 October 2011” a source close to SEC told CSE Leaks.

SEC Director Malik Cader at Aquaventure Dubai Water Park at  Atlantis Hotel at Dubai,
United Arab Emirates. Search for Malik Cader in facebook and
 investigate his investing friends in CSE
go to link: http://www.facebook.com/malik.cader?sk=friends 

Since the time when Cader took the DG seat he had been implementing so many rules in terms of regulation to CSE in what called to be the ‘Moves that are taken to develop a disciplined capital market in the country’. However it is now learnt from various stock market sources that although Malik Cader was acting as a highly disciplined regulator he had a circle of friends who had pushed up illiquid shares that has no value in the CSE; and those friends never got caught to Cader’s Rules.

“There’s an to head of a stock brokering firm who is called to be the Cashier of Malik” many other sources from Colombo Stock Exchange told CSE Leaks adding that industry officials are aware that particular top official charged money from ‘SEC caught investors and brokers’ telling them that he can sort the matter with Director General of SEC at several occassions.

At a time when Sri Lanka’s tourism is booming, in another development Sri Lankan stock market investors had been surprised by a new Hotel Development project coming up in tourism booming Pasikudah beach valued at an investment of nearly Rs.220 million or US $ 2 million that is yet to be constructed which is called to be a project jointly owned by a regulatory official at SEC and a head of a stock broking company with couple of Investors. “It is said this Leisure project coming up at Pasikudah is constructed by a capital market watchdog official’s father in law who runs a construction firm and who is a top architect in the island nation"Sources added. Now it is also learn from sources the Hotel is nearing completion.

Since Sri Lanka’s capital market watchdog got a new official, Malik Cader as the Director General of the Securities and Exchange Commission with effect from 2 November 2010, Sri Lanka’s Browns fame led subsidiaries and associates including Hydro Power Free Lanka (HPFL), Free Lanka Capital Holdings (FLCH), Browns Investments (BIL) had already been listed whilst Agstar Fertilizers, Sierra Constructions is yet to be listed in Colombo Bourse after an IPO or through ‘Introduction’ after a Private Placement. It is also learnt that several Browns fame investors made ‘Big Deals’ at a time when Malik Cader head the seat as DG in the capital market watchdog’s house in the island.

On the contrary ever since Securities and Exchange Commission Director General Malik Cader was appointed to DG seat Colombo Stock Market performance had been gradually dipping whilst retail investors had left market time to time since early January 2011.

Surprisingly when a published article in Sri Lanka’s Pink Paper;  Daily FT on 21 October 2011 questioned whether SEC DG ‘Malik Cader Out or In?’ the market indices shot up whilst stock prices soar with investors flocking up to CSE about the Good News that outlined the future of Malik Cader in Sri Lanka at the capital market watchdog’s house.

Joined as a Press Officer to SEC in mid 1980’s Malik Cader was the Director-Legal and Enforcement prior to being DG at the capital market watchdog’s house in Sri Lanka.

Questionable New Plan of CSE?

CSE Leaks exclusively learn from market sources that Colombo Stock Exchange’s (CSE) officials had consulted a global management consultant firm; McKinsey & Company, Inc. branch office in India to provide a better plan to the next development phase of Sri Lanka’s only capital market.

“CSE consulted McKinsey & Company, Inc. two months ago and so far nothing has happened and it was recommended by the CSE Chairman and its Chief Executive Officer” a top source said to CSE Leaks.

It is also learnt that so far McKinsey & Company had not been able to get an official appointment from Sri Lanka’s top treasury secretariat of the island nation to discuss the development plan for the capital market of Sri Lanka.

Meanwhile it is learnt from market sources that McKinsey & Company had been interviewing top Board of Directors of CSE, Stock Brokers, Unit Trusts and largest investors for nearly month since they started to develop a plan for the growth of CSE.

McKinsey & Company in India is established in Gurgaon in Haryana (close to New Delhi) and Mumbai whilst Gurgaon office is housed at Plot No. 4 Echelon Institutional Area, Sector 32 Gurgaon 122001, Haryana, India having phone numbers +91 (124) 661 1000 and fax number +91 (124) 661 1400.

The McKinsey Knowledge Center is located in Gurgaon and is the largest hub of knowledge professionals within McKinsey according to reports. McKinsey is said to be an advisor and counselor to many of the most influential businesses and institutions in the world and serve more than 80 percent of Fortune magazine’s list of the Most Admired Companies.

As a global management consulting firm that focuses on solving issues of concern to senior management; McKinsey serves as an adviser to many governments and institutions too. It is recognized as one of the most prestigious firms in the consulting industry and has been a top employer for new MBA graduates since 1996 globally.

Citrus Leisure PLC (REEF) to come up with couple of IPOs?

Citrus Leisure flagship Hotel at Hikkaduwa, Sri Lanka

After undergoing a management change in 2010, former Hotel Reefcomber PLC now Citrus Leisure (REEF) will come up with couple of IPOs on coming months to raise funds to their newest to ventures, an analyst told CSE Leaks.

Citrus Leisure in the last quarter of 2010 bought two new lands at Kalpitiya and Waskaduwa in a bid to build two new hotels with a view becoming a post war bullish fast growing hotel chain in the country.

“The IPOs might come in February” the analyst told CSE Leaks.

Citrus Leisure had earlier purchased 78 acres of land, known as Santhoduwa-Kalpitiya, to construct a four star resort in Kalpitiya in Sri Lanka. The proposed resort will feature 150 rooms and 28 water front villas. The water front villas will be constructed facing a 50 meter-wide waterway which cuts through the land and connects at the end to the sea. Murad Ismail, a Sri Lankan architect, has designed the resort.

The water villas will feature individual gondolas providing the occupants access to the sea. The villas will be made available to local and foreign high net worth individuals on a 99-year lease basis.

The ‘Santhoduwa-Kalpitiya’ site is ideally placed in close proximity to the whale- and dolphin-watching sites in the seas off Kalpitiya and the magnificent Wilpattu National Park, home to the elephant and the elusive Ceylon leopard.

Citrus Leisure will operate the villas as part of the hotel with the concurrence of their owners. The company has spent approximately Rs.122.18 million (US $1.1 million) for land acquisition.

The purchase is Citrus' second major acquisition. Earlier, the company had acquired a 7.2 acre beach property in Waskaduwa and it will commence construction work on the site in early 2011. The proposed scheme would be a 150-room, four-star property.

Sri Lanka’s home grown advertising giant Triad and its creative duo Dilith Jayaweera and Varuni Amunugama Fernando bought a majority stake in Reefcomber through Emagewise Ltd., a private venture of Triad Advertising in 2010 and rebranded the company as Citrus Leisure PLC.

MBSL M.R. Shah revealed; Will he secretly liquidate Ceylinco Investments & Realty?

Why did M.R. Shah send Gamini Karunathilake home? 

Left: M.R. Shah, while A.P.Gaminii Karunathilake opening the
City Branch of MBSL in September 2010 with M.R. Shah.

According to exclusive internal sources from Merchant Bank of Sri Lanka (MBSL), its present Chairman M.R. Shah is under many deals with regards to Ceylinco companies that he is managing under island nation’s Merchant Bank house, a subsidiary of Bankers to The Nation; Bank of Ceylon.

“M.R. Shah is secretly trying to liquidate the Standard Credit Lanka Limited former Ceylinco Investments & Realty Limited” a concerned depositor recently revealed in a letter to CSE Leaks.

However, when CSE Leaks tried to contact M.R. Shah he was not available for comments whilst no return calls were received when tried to contact Sanka Wijesinghe’s mobile who earlier headed Ceylinco Investments & Realty Limited under Ceylinco umbrella.

Back in August 2010, Ceylinco Investments & Realty was retiled as Standard Credit Lanka Limited under the supervision of its managing agent Merchant Bank of Sri Lanka (MBSL). That time Shah had said that company is not accepting any public deposits while it was spending nearly Rs.30 million per month to pay arrears and interests of customers. Shah had said company will start to accept public deposits soon and it had retained customer confidence among its 3800 depositors.

M.R. Shah had also said that the company has a five-year master plan to continue the pawning business opening its official pawning business centre at Union Place, Colombo.

Meanwhile reports reveal that Standard Credit Lanka Limited is close to finalising an Rs.100 million private placement deal with a new investor, Entrust Limited to convert 68% of their deposits into shares.

Entrust Limited now headed by a different board of directors is another former Ceylinco subsidiary, Ceylinco Shriram Securities Holdings which retiled under ‘Entrust’ brand in the wake of Golden Key financial fiasco. However,  following this capital restructuring exercise, Entrust would have the controlling stake amounting to over 51% of Standard Credit Lanka Limited . As per reports Entrust will come in to rescue to meet a Rs.648 million deposit liability of Standard Credit Lanka Limited.

Former Ceylinco Investments & Realty Limited now known as Standard Credit Lanka Limited will go for an Initial Public Offering (IPO) next year under the directives issued by the Monetary Board after this private placement deal with Entrust according to sources.

Sri Lanka’s former corporate whistleblower, the active Unionist M.R. Shah who was once the President Ceylon Bank Employee's Union (CBEU) today heads one of Sri Lanka’s top state owned investment banking subsidiary MBSL and manage fallen entities of Ceylinco such as The Finance PLC (TFC), The Finance & Guarantee Co. Ltd. (F&G), Ceylinco Building Society, Ceylinco Sussex School Network, Ceylinco Savings Bank (Now MBSL Savings Bank) and Ceylinco Investments & Realty Ltd. which is now Standard Credit Lanka Limited.

Ultimately, M.R. Shah is today sitting on boards which were once led by Lalith Kotelawala; who once slammed M.R. Shah by seeking damages of Rs.1 billion through filling a case against the M.R. Shah and his union and the union General Secretary for defamation back in November 2008.At the time it was said that in September 2008, Court issued an Enjoining Order restraining the CBEU, Shah and CBEU General Secretary from publishing and/or issuing and/or circulating any statement derogatory and/or defamatory of Kotelawala, while Shah had written to Seylan Bank PLC General Manager/CEO with a copy to the Labour Commissioner General containing statements derogatory and/or defamatory of Kotelawala while the enjoining order was in force.

Ceylinco Group Chairman Deshamanya Dr. Lalith Kotelawala on Tuesday filed a petition in the Colombo District Court against President M.R.Shah for alleged Contempt of Court.

The incident turned out when Whistle Blowing M.R. Shah’s Ceylon Bank Employees Union (CBEU) filed action against Seylan Bank PLC and its Founder Chairman Deshamanya Dr. Lalith Kotelawala in the Colombo District Court and obtained two enjoining orders against Seylan Bank and Kotelawala, refraining them from preventing Seylan Bank employees joining the CBEU and from interfering with its activities.

However, later both Seylan Bank and Kotelawala filed two Leave to Appeal applications with the Colombo High Court against the said enjoining orders. The High Court having heard the submissions made by Counsels for Seylan Bank and Kotelawala, and being satisfied that the CBEU had allegedly misrepresented facts to Court in obtaining the enjoining orders and that the CBEU has not presented a prima facie case, issued an interim order suspending the said enjoining orders. Further, High Court also granted Leave to Appeal to Seylan Bank and. Kotelawala at the time.

M.R. Shah Vs. A.P.Gamini Karunathilake

After assuming duties as Chairman of Merchant Bank of Sri Lanka PLC in June, 2010, later in December 2010, former whistle blower M.R. Shah suspended MBSL’s long standing Chief Executive Officer (CEO) and reputed banker, A.P.Gamini Karunathilake while internal sources from the bank said it was a personal grudge that may have led to the suspension of CEO by M.R.Shah who directed and internal investigation.

“Frankly to tell you, he has only taken one extra salary and kept the one of company owned cars at home” said a source from MBSL to CSE Leaks revealing about the background of A.P.G. Karunathilake’s suspension.

Banking sources say that State Merchant Bank is much indebted to Karunathilake who had brought about a steady growth after taking over the administration from Sunil Wijesinghe in 2005 who ran a dud porcelain company, Dankotuwa Porcelain (DPL) until Sri Lanka’s trail blazer company Environmental Resources Investment PLC (GREG) came into rescue of Wijesinghe’s porcelain entity. A.P.Gamini Karunathilake is said to have hurdled major operations that lifted the MBSL from a crisis to a sound position.

However, on 3 January 2011, Merchant Bank of Sri Lanka (MBSL) Chief Executive Officer Gamini Karunathilake got an enjoining order from the District Court of Colombo against his suspension beating former whistleblower M.R. Shah’s so called ‘baseless’ misconduct allegations that were un-described.

Karunatillake is a professional banker with over 30 years of experience. He obtained a B.Com (Hon) Degree from the University of Sri Jayewardenepura and an MBA from the Post Graduate Institute of Management (PIM) of Sri Lanka. He is a fellow member of the Institute of Bankers of Sri Lanka and was a visiting lecturer on ‘Law and Practice of Banking’ for the Bachelor of Commerce and Economics Degree programmes and on ‘Banking and Finance’ for the MSc. Management Programme at the University of Sri Jayewardenepura. He also served as a lecturer and Chief Examiner on ‘Law and Practice of Banking’ and ‘Practice of Banking’ at the Institute of Bankers of Sri Lanka. He was also a Director of Merchant Credit of Sri Lanka Ltd.

Why GREG drastically fell, was it to facilitate Nimal Perera, or Did Nimal Perera sell his GREG shares?

Nimal Perera sipping some Wine
at a High Exclusive Corporate Event

High Exclusive sources close to Colombo Stock Exchange revealed CSE Leaks that High net worth investor Nimal Perera had sold his GREG or famous Environmental Resources Investment (ERI) PLC shares before the week ended 23 January 2011 as the share shot up high again to above Rs.100 and along with slight appreciations in the warrants.

However, as at 30 September 2010, according to Quarterly report of ERI PLC Nimal Perera had 2.34 million GREG shares which amounted to 0.75% of the company.

Some sources say that he has sold this stake to put money for Vallibel One IPO where he is also on Director board; However it could be now derived according to our analysis may be that Nimal Perera had applied for a few more shares of Vallibel One to profit from CSE when it is listed and since he would have applied by a Bank Guarantee he would have sold his GREG shares to partly settle the money for Bank Guarantee’s Bank Charges. 

No Perera’s for The Finance PLC share issue-Official?

Although, lots of Institutional and a few high net worth investors had applied for recently concluded The Finance Co. (TFC) PLC secondary IPO, A top official from TFC revealed CSE Leaks that none of the Big Time players of Sri Lanka’s stock market had applied to the share issue adding that its only genuine people who have applied to shares.

“No Pereras, its only genuine people who have applied” source from TFC told CSE Leaks.

This in turn resembles according to some corporate community in the country that ‘Perera Duo’ who is bullish in Colombo Stock Exchange apart from their Casino business in the country are not ‘So Genuine’, which is questionable to CSE Leaks.

However on the other hand when The Finance Co. PLC official says that ‘Pereras are not Genuine’ it is arguably questionable whether The Finance Co. PLC’s Founder Chairman, Dickman’s Road Financier Lalith Kotelawala who master minded Rs.26 billion South Asia’s largest ever Financial Scam in Golden Key with Khavan Perera are genuine people in Sri Lanka.

Sri Lanka Market Follower Reveals Watch Dog’s ‘Goni Billa’ Price Band Theory?

By CSE Leaks Professor

The so called unexplained ‘Goni Billa’ Formulae or the 10% Price Band Theory implemented by the Buckle Tight Watch Dogs of Sri Lanka’s Capital Market was revealed to CSE Leaks by a leading market follower in the country.

“According to our studies if a company has more than 30% of Public Float, that share will never get caught to ‘Goni Billa’ Price Band” said the well versed market analyst to CSE Leaks.

“That is why REEF.N was never caught with Price Band. I guarantee similarly that if Touchwood (TOUCH) share reach Rs.500 within a day it will never get caught to ‘Goni Billa’ because there is no major shareholder for Touchwood. It is 100% guaranteed Touchwood will not get caught to 10% Price Band” he concluded.

Ceylinco to sell the Model ‘Ceylinco City’ in Colombo

The Finance PLC to sell two iconic properties of the company at R.A. De Mel Mawatha

Sri Lanka’s oldest Golden financial power house, Ceylinco owned The Finance Company (TFC) PLC which had been in the forefront of creating confidence in country’s finance industry continuously for four generations from Great Grand Fathers’ to Grand Sons has recently call for sealed offers to sell two iconic properties which are the benchmarks of the company.

In a recent advertisement in weekend news papers island nation’s oldest finance company The Finance Company (TFC) PLC had invited for offers to outright purchase of two commercial properties, including its head office at No. 55, R.A. De Mel Mawatha, Colombo 04 and No.9A, De Fonseka Place, Colombo 04 amidst a recent secondary offer by the company to raise funds through a public share issue which is offering 40 million ordinary voting shares at Rs.40 per share.

The four storey commercial building property at No.55, R.A. De Mel Mawatha is built on a 72.65 perches land covering 17,800 square feet with ample parking facilities added with access to two road fronts including Gower Street. The other two storey commercial building covering 2500 square feet is built on 13.75 perches land which is just 25 meters from R.A. De Mel Mawatha and 50 meters from Galle Road, in Colombo.

Accordingly any interested party could send their offers titled ‘Offers for the purchase of Commercial Property’ indicating the either property name out of two on the top left corner of the envelope to reach the company’s Assistant General Manager-Administration before the noon of 28 January 2011.

The advertisement further said that prospective buyer should deposit a refundable fee of Rs.250,000 in cash with  TFC, prior to obtaining the title documents of each property while once the buyer is accepted; the buyer should pay 25% of the offer within two working days and the balance with next 14 days whilst the refundable deposit will not be refunded at an instance where buyer delays the full payment of the property.

R.A. De Mel Mawatha which was formerly known as Duplication Road was the central hub Sri Lanka’s former most diversified conglomerate Ceylinco Consolidated, where many head offices of Ceylinco subsidiaries were located including Chairman Lalith Kotelawala’s house and Ceylinco Consolidated head office which was also the consular office of Honorary Consulate for Singapore.

Many Sri Lankans arguably called R.A. De Mel Mawatha as ‘Future Ceylinco City’ as many subsidiaries such as Ceylinco Consolidated, Ceylinco Shriram, Ceylinco CISCO (Now CERTIS Singapore), Ceylinco Fast Cash, Golden Key Credit Card Company, The Finance Co. PLC, Ceylinco Building Society, Lalith Kotelawala’s House at No.28, Elibank Road, American National College (ANC) are all housed in the close proximities of the Road whilst many ‘Big Properties’ at R.A. De Mel Mawatha was once owned by Ceylinco Group.

However, as at today only Punarjeeva Karunanayake advised by Jagath Alwis is been able to carry out Ceylinco’s Multi Million Education business with ANC and Wycherley International School  while securing some of the Premier R.A. De Mel Mawatha properties owned by Ceylinco.

While its main properties are up for sale The Finance Co. PLC had started issuing 10% of the value of its deposits by way of non-voting shares to company’s depositors due to the collapse that resulted after Ceylinco owned Golden Key shutting down its operations without paying back its Rs.26 billion worth depositors.   

GREG So Called Big News: Environmental Resources to announce platinum subsidiary sale?

The all time popular stock since 2009 among Sri Lanka’s listed companies Environmental Resources Investment (ERI) PLC or much popular GREG had recently sold its major stake in a platinum company through its offshore investment company, Environmental Resources Ltd. in British Virgin Islands according to a top stock market analyst in the country. The company will announce the sale of its platinum mining firm’s stake according to a Director type of a leading stock brokering house .

Director Research type said to CSE Leaks that Colombo listed Environmental Resources Investment (ERI) PLC had recently sold a portion of its foreign owned stake at Eastern Platinum Ltd amounting to 22 million shares through Toronto Stock Exchange (where Eastern Platinum Ltd is listed) and that money which ERI owned Environmental Resources Ltd in British Virgin Island would be utilized for a new investment.

“I don’t know why Environmental Resources is delaying their announcement” said Director Research type who is also a top Analyst.

However, Environmental Resources Ltd. registered in British Virgin Islands had 24 million shares of Eastern Platinum valued at US $ 35.5 million (nearly Rs.4 billion) according Environmental Resources Investment (ERI) PLC Annual Report for the Financial Year ended in 2010.

When contacted by The CSE Leaks, the Environmental Resources Investment (ERI) PLC’s Manager Corporate Affairs Harshanee Deshapriya said that “If there is such a sale we will inform it to market in due time”. However, none of the Directors of ERI PLC were not available for comments, at the time of going to press.

Meanwhile, as per reports nearly 32 million shares of Eastern Platinum had changed hands in Toronto Stock Exchange on January 18, the date of which Environmental Resources is said to have done the transaction according to market sources and Director Research Type.

In July 2007, UK Based Hedge Fund Manager, Lionhart Advisors Group headed Lionhart Investments Ltd. acquired a controlling stake in Sri Lanka’s Walker & Greig, a low performing listed shell company at the time by retiling it as Environmental Resources Investment (ERI) PLC, for Rs.76 million and had turn around Sri Lanka’s Colombo Bourse at the peak of its performance since end of war while making the ERI PLC a group that come in to rescue and acquire Sri Lanka’s sick companies such as Dankotuwa Porcelain PLC (DPL), Ceylon Leather Products PLC (CLPL), Colombo Pharmacy PLC,DNH Financial (Pvt) Ltd, Enterprise Technology (Pvt) Ltd, Olancom (Pvt) Ltd, Roomsnet International (Pvt) Ltd, and South Asia Textile Industries Lanka (Pvt) Ltd.

In December 2009 Environmental Resources Investments PLC (ERI), announced it was acquiring 100% of Environmental Resources Limited (ERL), “A company incorporated in British Virgin Islands and holding assets of equity and debentures focusing in the platinum mining industry in South Africa, including Eastern Platinum Ltd”.

Accordingly, ERI agreed to pay US $ 76 million to acquire all of British Virgin Island based ERL from Osiris International Trustees (OSTI) over a period of time through an installment payment of ten tranches with Sri Lanka’s Exchange Control Approval while ERI PLC had so far paid 3 tranches via the ERI’s rights issues and warrant conversions on 6 April, 19 May, 2 November 2010 in the sums of Rs. 432,454/-(US $ 6,426,740.24) and Rs. 714,792,266 (US $ 6,261,868.30) and Rs.606,100,000 (US $ 5,406,779.66) to OSTI to date.

On the other hand, Lionhart Investments continues to remain as the biggest foreign investor in Sri Lanka’s stock market being the major shareholder (over 80%) of Environmental Resources Investment (ERI) PLC.

Meanwhile, according to global hedge funds sources, Lionhart Hedge Fund uses Toronto Stock Exchange as a capital market platform where the Hedge Fund could gain 'high profits in a short period of years and exit at the right time' through divesting its stakes in listed companies in Toronto.

Schaffter’s Dunamis Capital (CSEC) to go for a Private Placement?

From the sources close to some of Sri Lanka’s High time investors, CSE Leaks learns that Insuring family, Schaffters owned Dunamis Capital PLC (CSEC) former Kshatriya Holdings is going for a large scale private placement to raise funds for the group’s future expansions.

At recent times Dunamis had shed its many shell companies while the company had also gone for a rights issue offering 24.59 million shares at Rs.10 per Right to raise Rs.245.99 million. Meanwhile Janashakthi Insurance in a filling to Stock Exchange on January 20, 2011 said that the it had increased the ownership of Dunamis Capital to 21.32%. 

EPF buys shares of Vallibel One to the tune of Rs.200 million?

From the news coming out of latest private placement of Vallibel One which offered 160 million shares at Rs.25 on January 17, sources from Colombo Stock Exchange says that island nation’s largest pension fund Employees Provident Fund (EPF) had recently applied for shares of Vallibel One for the tune of approximately Rs.200 million.

Island nation’s economic twist booster and financial planner who is preparing the ‘Miracle of Asia- Sri Lanka’ to face firmly for ‘Future Shocks’, Central Banker Ajith Nivard Cabraal leaded board manages Sri Lanka’s workers savings fund, EPF which has moneys exceeding Rs.855 billion according to reports. EPF had recently increased its stakes in country's private banks and hotels such as HNB, Galadari and Insurance companies.

Meanwhile sources close to Vallibel One issue told CSE Leaks that the private placement had already been oversubscribed and that it will come with the IPO on March 2011.

Vallibel One Limited is a diversified holding company incorporated on 09th June 2010. Prior to the proposed private placement and initial public offering, 100% of the shares in issue are held by the business tycoon Dhammika Perera and companies controlled by him.

Through its subsidiary companies Vallibel One has made strategic investments in financial services, manufacturing and leisure industry.

Vallibel One has 51% stake of LB Finance (LFIN) PLC and strategic investment of 15% in Sampath Bank PLC (SAMP) with another 51% stake of Royal Ceramic PLC (RCL).

Company is raising funds to finance an equity investment of Rs.3 billion in a new hotel project developed under its full owned subsidiary Greener Water Limited. The hotel will target the high end of the tourist segment and will be positioned as a five star hotel. At commencement, gross Average Room Rate will be US $ 180 and will increase up to US $ 220 by the 5th year of operation.

Greener Water Ltd has already invested Rs.266.73 million in a 14 acre land located in Kochichikade, Negombo, Sri Lanka. The company intends to build a 382 room, luxurious five star hotel designed by WATG of Singapore, one of the world’s leading design consultants for the hospitality, leisure and entertainment industry. The construction of the hotel is estimated to take two years and commercial operations are planned to commence by end of 2013.

The total estimated cost of the hotel project is Rs.5 billion and the hotel will be developed as a BOI approved investment which will qualify for 8 years tax holiday, and a concessionary tax rate of 15% thereafter.

Amidst billions of losses The Finance PLC to be acquired by NSB, Bank Of Ceylon and LOLC?

High Exclusive sources close to Sri Lanka’s oldest former Golden Financial Power House, which is now fallen; The Finance Company PLC says that with its new Rs.40 per share 40 million Ordinary Voting Shares Secondary IPO in cards, that the Sri Lanka’s state owned banking Giants National Savings Bank (NSB), Bankers to the Nation; Bank of Ceylon (BOC) along with Rohini Nanayakkara headed Japanese Financial House Lanka Orix Leasing (LOLC) is bidding to buy major stakes of former Dickman’s Road Financier Lalith Kotelawala owned The Finance Company PLC (TFC).

“The deal will be concluded somewhere in September” our source from The Finance Company PLC added highlighting that The Finance Company expect a better future after the change of the ownership.

“Chairman Lalith Kotelawala will also sell his shares” source told CSE Leaks. However as per shareholders details of The Finance Company PLC, Lalith Kotelawala has 526,427 Ordinary Voting Quoted Shares of the company while another 46,232 Voting Shares of the company owned by Lalith Kotelawala are categorized under Unquoted shares.

As per 30 September 2010 The Finance Co. PLC’s (TFC) major stakes were owned by Ceylinco Investments Co. Ltd (37.13%), Jivaka Lalith Bhupendra Kotelawala (2.93%), Thuraton Investments Ltd. (2.37%), Pershing LLC S/A Auerbach & Grayson & Co. (2.2%), S.N.C.W.M.B. Kandegedera (1.84%) and Marian Martinus Christopher Jeyaraj Fernandopulle (Deceased Former MP of Sri Lankan Parliament) (1.7%).

Meanwhile, the financials of The Finance Co. PLC forecast that company’s income has drastically fallen from Rs.6.69 billion in 2009 to Rs.3.8 billion in 2010 whilst the company had consecutively reported losses amounting to Rs.2.56 billion in 2009 and further loss at Rs.4.28 billion in 2010 after the last profit at Rs.662 million in 2008. It also outlines that shareholders funds stand at negative Rs.2.91 billion while the new Secondary IPO is projected to rectify the negative worth of the company to positive Rs.3.6 billion with issued Secondary IPO public money.

The Finance Co. PLC’s Balance Sheet for the 30 September 2010 says that it has a ‘Mismatch’ between company’s assets and liabilities amounting to Rs.4.08 billion where as the public deposits from 2009 to 2010 has decreased by Rs.1.7 billion from Rs.25.74 billion (2009) to Rs.23.97 billion.

Accordingly, company’s assets are valued at Rs.24.9 billion which is lower than its total liabilities at Rs.28.98 billion.

Panasian Power eyed by a Big Time Indian Investor for Rs.7 a Share?

One of sites of the Power Projects of Panasian Power

Despite upcoming ‘Power Shock’ to Sri Lanka’s electricity consumers amidst high electricity tariffs on duly arriving electricity bills and continuous torrential rains that spilled water rich irrigation system in the country,  resulting in 100% high capacity hydro power generation, market sources say that  one of the recently listed power companies, Panasian Power (PAP) is eyed by a bullish Indian Investor.

“They are trying to negotiate the deal for Rs.7 per share” said our exclusive market source to CSE Leaks adding that the deal will happen soon. Meanwhile Panasian Power (PAP) closed high at Rs.4.20 on 12 January 2011 as at the end of trading day.

High Net Worth Investor Nimal Perera applies to whole IPO of HVA Foods?

Nimal Perera

It is revealed by stock industry analysts and investment knowledge hunters that recently launched Rs.319 million IPO of Heladiv Tea; which is presently owned by Rohan Fernando and Varuni Amunugama Fernando leaded board of Directors had been fully applied by one of Sri Lanka’s leading high net worth investing individual Nimal Perera.

Market sources well versed with foreign fund investments in Sri Lanka told to CSE Leaks that Nimal Perera is among a top investor who has applied to HVA Foods whole IPO. However , although there could be such high time investors they will only receive a part of the portion they applied after relevant allocation as usual.

Meanwhile, this comes into light while the HVA Foods announced Colombo Stock Exchange; that its IPO was oversubscribed on Wednesday 12 January, 2011.

Nimal Perera was an originally a high time bullish post war and prevailing war time investor, Dhammika Perera's friend and investment advisor who manages the Dhammika Perera's investments. He is also the Managing Director of Royal Ceramics, and Finance Director for few other firms owned by Dhammika Perera.

Meanwhile in another development, sources close to Colombo Stock Exchange says that former Connaissance De Ceylan (CONN) which is Amaya Leisure PLC owned by Dhammika Perera is in talks for a possible merger with another entity soon. However CONN share closed high at Rs.122 on January 12.

Shangri La's Seven Star hotel Insurance Deal signed up by Ceylinco Insurance?

Shangri-La development site in the heart of Colombo,Sri Lanka

According to top end exclusive sources from Sri Lanka’s leading Insurance giant, Ceylinco Insurance PLC; it had signed up for insurance deal with the upcoming US $ 500 million investment on a Sri Lanka's first ever Seven Star hotel, that is going to be owned by world famous hotelier Hong Kong-based Shangri-La group.

This was confirmed to CSE Leaks; by an exclusive high profile Director who holds Director Posts in a number of Ceylinco companies, “Yes Partly” said (answering to CSE Leaks' question on whether Ceylinco Insurance has got the Shangri La Hotel Insurance deal) the top Director type who is also one of the Deputy Chairmen of a sub group of Ceylinco; at a recently concluded high profile social of a new beverage company IPO launch.

In the high time sources reveal that, somewhere back in last week of October, Ceylinco Insurance PLC has send one of its officials to Singapore to sign the Shangri-La Insurance deal following the three day visit of Shangri-La head’s visit to the Sri Lanka.

Accordingly, CSE Leaks learns from Sri Lankan corporate sources that Ceylinco Insurance is sitting on a wealth management portfolio where island nation’s top companies insured under its policies such as HSBC-Sri Lanka, along with several other Banks and afforesting companies such as Touchwood PLC.

On the contrary another source from insurance industry in Sri Lanka told CSE Leaks that if Ceylinco has got insured the Shangri La hotel property that it will in turn boost the revenue of Ajita De Zoysa owned ADZ Insurance Brokers of Sri Lanka as many of Ceylinco’s Life and General Business that has to be Re-Insured has been Re-Insured via ADZ Insurance Brokers which has a partnership with one of the world’s leading risk managing and reinsuring  service provider Marsh.

Measnwhile, sources close to ADZ Insurance Brokers says that company is expecting to reach revenue amounting almost Rs.1 billion during this year.

During the last quarter of 2010 Hong Kong Based Shangri La Asia Limited announced the purchase of six acres of government land facing the Galle Face green promenade, a prominent landmark in Colombo, Sri Lanka.  The development will be a multi-use complex with high-end retail facilities, deluxe apartments and a 500-key luxury hotel to open in early 2014.  The purchase marks the entry of the hotel group into Sri Lanka, often referred to as “The Pearl of the Indian Ocean.” says Shangri la’s corporate website.

Shangri-La is also planning to develop a second property, a 300-key city resort on approximately 100 acres of land in Hambantota, on the southern coast of Sri Lanka, to be opened up in 2013.

“Sri Lanka is a country of unsurpassed natural beauty, rich in cultural heritage, and above all it is well recognised for its warm and hospitable population.  The local government is fully committed to rebuilding the economy following the end of three decades of conflict and we believe that Shangri-La will be able to assist in positioning the country as a prime global tourist destination.  Both Shangri-La hotels strategically fit into the group’s ongoing expansion plans to link the Indian subcontinent and our South East Asia developments,” Greg Dogan, President and CEO of Shangri-La International Hotel Management Ltd. reported to have said.

It is reported that Shangri-La Hotel chain had paid a premium price amounting to US $ 125 million for the property at Galle Face (Army headquarters) while the average price of a perch was around Rs.8.5 million.

Hong Kong-based Shangri-La Hotels and Resorts, one of the world’s premier hotel companies, currently owns and/or manages 70 hotels under the Shangri-La and Traders brands, with a rooms inventory of over 30,000.  Over almost four decades the group has established its brand hallmark of ‘hospitality from the heart.’  The group has a substantial development pipeline with projects in Austria, Canada, mainland China, India, Macau, Malaysia, Philippines, Mongolia, Russia, Qatar, Sri Lanka, Turkey and United Kingdom.