By Insider
Nihal Sri Ameresekere, a former Chairman of Hotel Developers (Lanka) Ltd. (HDL) has filed a petition in the District Court of Colombo to wind up HDL. The District Court has made order to publish the Gazette and Newspaper Notifications in terms of the winding-up rules under the provisions of the Companies Act.
The sole business of HDL was to develop and own the Hilton Hotel situated on the 2 allotments of UDA Land, which have been surrendered under the provisions of State Land Ordinance by the UDA to the Government in1999. Therefore, the Hilton Hotel Buildings of HDL now stand on lands, which do not belong to HDL, with HDL having no lease of these government lands or any entitlement, thereto.
The Chief Valuer in August 2005 had valued these government lands, in extent of 7 acres on a 99-Year lease basis, at Rs. 4,018 million., and had also valued HDL’s Buildings and other Assets at Rs. 4,981million.
The Issued Share Capital of HDL is Rs. 452,261,410/-, divided into 45,226,141 Ordinary Shares of Rs. 10 each, of which 25,089,750 Shares of Rs. 10 each having a nominal value of Rs. 250,897,500 had been allotted in 1984 for a capitalised value of a 99-year under-lease of these 2 allotments of UDA Land, which Lands having been surrendered by the UDA to the Government in July 1999, the consideration for this Shareholding of 25,089,750 Shares has got frustrated, and therefore this Shareholding stood and stands as not paid for.
As a result of a modified interim injunction issued by the Court of Appeal, on which the Supreme Court had granted leave, HDL has been prevented from even circulating to its shareholders its audited accounts in conformity with the decree entered by District Court since March 1990, now for 16 years. However, HDL’s shares are currently trading on the ‘Default Board’ of the Colombo Stock Exchange, with the public unaware of the hopelessly bankrupt position of HDL, in the belief that there is a pending settlement, with a financial re-structuring of HDL.
As per the Government’s Proposals of July 2005 for the re-structure of HDL, the Balance Sheet of HDL as at 30.6.2005 ( see Table 1):
The above reveals the hopelessly bankrupt financial position of HDL, where the Share Capital and Reserves have got completely wiped out, with enormous accumulated losses as at 30.6.2005, which would have further deteriorated, with the payment of the instalment to the Japanese contractors on 30.6.2006, together with the interest thereon.
As per the defaulted debts by HDL to the Government as at 30.6.2005 disclosed by the Government Proposals of July 2005, the updated defaulted debts by HDL to the Government as at 30.6.2006 (see Table 2), a total of Rs. 5,566,880,397/-.
In addition, to pay the instalment due to the Japanese contractors as at 30.6.2006 of Japanese Yen. 522,278,522, together with 5.25% p.a. interest thereon i.e. Rs. 502,479,073 (at the rate of SL Rs. 0.9141 per Japanese Yen.) the Government would have advanced a further substantial payment to HDL, notwithstanding the aforesaid defaulted debts by HDL to the Government of both Capital and Interest, which HDL, as the borrower, has to re-pay to the Government, as the Guarantor.
The balance debts of HDL to be paid to the Japanese Contractors as at 30.6.2005, which are guaranteed by the Government ( see Table 3):
In 2005 the government proposed restructuring of HDL which according to estimates would have accumulated a debt of Rs. 9,300,000,000 by 31.3.2010. The government proposal also stated that if immediate restructuring was not possible to unwind HDL, transferring the Hotel Building to the Government, which owns the Land.
In May 1990, the Secretary, Ministry of Finance, in view of the then bankrupt financial position of HDL, had intimated to the Attorney General, that the Government, as a Shareholder of HDL, was considering to apply to Court to wind-up HDL, and had sought advice on the steps to be taken.
In September 1990 Ameresekere had instituted a derivative action D.C. Colombo 3155/Spl, on grounds of fraud perpetrated on HDL, by ‘wrong-doers in control’ of the Company, and the District Court had issued interim injunctions in October 1991, which had been upheld by the Supreme Court in December 1992, preventing payment of any monies by HDL or by the Government, which had issued Government Guarantees for such payment on behalf of HDL, to the Japanese contactors, who constructed the Hilton Hotel. As a consequence of this Case and interim injunctions issued, the Government at that time had not proceeded on the contemplated action of winding up HDL
As a consequence of this action the Japanese contractors had written-off Jap Yen 17,586 million on their claims against the Government on Government Guarantees that had been given.
The Government’s proposals for financially re-structuring HDL had been formulated by the Cabinet Appointed Negotiation Committee.
Therefore in terms of the recommendations of the Cabinet Appointed Negotiation Committee, the Cabinet had decided that there would be no other option, but to wind-up HDL, if not re-structured as proposed by the Government in July 2005. Thus and thereby, HDL being majority owned by the Government, HDL Directors, particularly those nominated by the Government, are bound to give effect to such Cabinet Decision.
Government Directors of HDL, nor the Secretary to the Treasury, had taken action to give effect to the Cabinet Decision to wind-up HDL, if HDL cannot be re-structured, as had been proposed by the Government, which, in fact, is the situation now. The endeavours made over a period of 6 years to resolve the problems of HDL and financially re-structure HDL had proven futile and there is no other remedy, but to wind-up HDL, as had been proposed by the Cabinet Appointed Negotiation Committee and approved by the Cabinet.
In the context of the foregoing facts, HDL is hopelessly bankrupt and given the current status of affairs, it is impossible to operate it as a viable company, The public Shareholders of HDL have not derived and cannot expect to derive any benefits from HDL.
HDL’s Share Capital of Rs. 452.2 million. is completely eroded and wiped out, with the accumulated loss of Rs. 6351.5 million. as at 30.6.2005 and further deteriorated by now. Rs. 250.9 million.
HDL has defaulted enormous debts to the Government, both Capital (Rs. 2,991,482,954/-) and Interest (Rs. 2,575,397,443), a total of Rs. 5,566,880,397 as at 30.6.2006, with further debts of Rs. 2,386,551,716 as at 30.6.2005 to be paid to the Japanese contractors with interest of 5.25% per annum.
Therefore, Application has been made by Ameresekere to Court to make Order to wind-up HDL, on the ground that it is just and equitable that the said Company be wound-up, under the provisions of the Companies Act ‘ In the event of HDL be wound-up, the Land valued by Chief Valuer at Rs. 4018 million. for a 99-year Lease, already belonging to the Government and not to HDL, with HDL having no lease or entitlement to the Land, the Hotel Building therefore would go with the Land to the Government; which could then form a new Company, with a new Agreement with Hilton or any other Operator, on new terms.

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The award winning chef says Tourist Board should promote Lankan cookery

By Jayashika Padmasiri
Chef Dimuthu Kumarasinghe is a man that has earned respect for his skills by participating and representing our country in the culinary world cup held in Luxembourg recently where he won four gold medals. Up to this date his other achievements includes 36 gold medals which he has won since since 1989.
He entered the field in 1989. “I started my career as a trainee cook in the Riverina Hotel in Berruwala. Actually it was my brother who introduced me to this field. I never planned it and if I didn’t enter this field I would have done some kind of business. Then I worked in the Colombo Hilton for three years and went to the Middle East where I worked as the pastry chef in the Inter Continental, Bahrain for ten years and came to Sri Lanka in 2000 and started working at the Aitken Spence Hotel group as the skill development chef.”
What is your specialty? “I like pastry making. All the awards I won are for pastry making. When I make pastries I try to use a lot of Sri Lankan ingredients like coconuts and things.”
He’s a person who wants to incorporate eastern style of cooking into the main stream. “It is hard only to use our ingredients, we have to mix both. But I try to use a lot of our ingredients when I cook.”
Expressing his opinion of what he learnt from this event he commented “The experience taught me a lot. I had to compete with 40 countries and more than 12,000 representatives. I didn’t know whether I would win, but I always cherished the hope of winning though participation.”
Talking about his future plans he said “This was my last international level performance because I plan to stop entering these contests. It takes a lot of hard work and commitment. I want to teach the things that I have already learnt. I am preparing a team of 20 members for the 2008 Olympics.”
“Yes I am already a teacher. I teach skill development for students. And my main objective in the future will be to create and to teach this team that will represent our country in the 2008 Olympics” he added.
Talking about the tourism industry in our country he said “The hotels and specially the hotel management in our country have contributed a lot to the development of the industry. As a chef who has worked in other countries I have seen that often there isn’t even a good buffet that has all kinds of food, both western and eastern. So I think that cookery in our country is up to the required standards but it is not within our power to promote it, the tourist board should promote it.”
By way of advice to the young who want toenter the field of cookery he says “This job requires a lot of commitment and training. Everything has a discipline, a proper way, a style and a method. So if they are willing to learn they can make it in this field.”

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PC House becomes a Microsoft OEM partner

By Quintus Perera
Appointment of the PC House as a Microsoft Original Equipment Manufacturer Partner (OEM) by the world’s leading IT giant Microsoft, is an endorsement of the commitment and dedication to providing customers a total solution in this mission critical industry, by the PC House, said S H M Rishan, Managing Director, PC House at the occasion of signing of the agreement in this regard at the Colombo Hotel Hilton, last week. MC OEM Partner status represents the highest level of competence and expertise with Microsoft technologies.
PC House has been regarded as one of the very few companies which has grown to be recognized in the PC business in Sri Lanka. In a relatively short period of seven years, PC house has gained recognition as a key stakeholder in Sri Lanka’s rapidly developing information and communication technology. Its services are extended though 28 regional branch network spread across the country from Matara to Jaffna and Colombo to Trincomalee.
Rishan said that as a direct consequence of this appointment they felt is a singular honour for the company, its portfolio of products, its operations in Sri Lanka and for their branded computer ‘Panora. He said that this is the first ever locally innovated branded computer. He said ‘Panora’ also achieved the honour to become the Personal Computer qualified to carry the “Designed for Windows XP” logo, by Microsoft Windows Hardware Quality Labs, which is a great achievement for a local brand and clearly demonstrates the world class quality of the Panora PC.
All Panora computers will only carry Genuine Windows as the operating system, thereby, enhancing the customer experience greatly.
Chris Atkinson, Vice President, South East Asia Microsoft Operations PTE who signed the agreement on behalf of Microsoft congratulated the PC House Ltd on its latest achievement on becoming one of Microsoft’s OEM partners. He said that at Microsoft they believe in supporting and building local IT eco systems in the countries they operate and he noted that the rapid progress PC House has made in certifying its Panora brand, becoming a gold certified partner and now in becoming an OEM Partner.
Atkinson said that since establishing their presence in Sri Lanka, they have been working closely with PC House and its latest achievement of becoming an OEM Partner will lay the foundation for an even closer relationship with Microsoft Sriyan de Silva Wijeyeratne, Country Manager, Microsoft Sri Lanka (Pvt) Ltd said that PC House passes another milestone in its rapid progress with its Panora brand. He said to become a Microsoft OEM Partner, stringent criteria has to be met. Panora computers were certified for the MS Windows Operating System and are the first locally manufactured PC to have achieved this status and Panora showed it has committed to maintaining global industry standards. He said PC house will now have a direct share in the branded PC market.

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A new solution for shortage of parking space

To ease the vehicle congestion in major cities in Sri Lanka various convenient parking facilities are sought. As a solution to the vehicle parking problem, Klaus Lanka (Pvt) Ltd together with Klaus Multi-parking of Germany are introducing multi-parking system, a space saving method that is adopted in many parts of the world.
When this method is used, the space used to park a single vehicle could be used to park (stack) 20 or more vehicles on top of the other, depending on customer needs.
Klaus method is one of the world’s first of this type of parking and they use the latest technology called ‘Multivario 2082’ Klaus multi-parking system offers the on-line access to the ProDesigner software for individually designing the system. ProDesigner can be used without specific knowledge of data processing or CAD. It helps the customer to find his perfect parking system
Klaus Multi-parking has been in this business for the last 40 years and among the large customer base, the system is used by Trump Towers in New York, The Credit Suisse in Zurich and The OUB building in Singapore, also.
The system is electronically operated.
This system is also provides methods to park additional vehicles in basements and garages where there is no height to park an additional vehicle and it is called the Pallet system which optimizes the use of space.
(QP)