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.