Kalpitiya Resorts claims SEC victimization

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A spokesperson for Kalpitiya Beach Resorts PLC told ‘The Nation’ that the company was being unfairly targeted by the Securities Exchange Commission (SEC) in the media.

The SEC has portrayed the company in negative light in relation to raising funds through an IPO in 2012 and implying that the public was cheated, the spokesperson who wished to remain anonymous said.  The company has officially called for an Extraordinary General Meeting on May 8, 2015 to seek approval from shareholders to respond to SEC allegations as well as negative comments made by Prime Minister Ranil Wickremesinghe in Parliament pertaining to the company.

‘Only a fraction of the money required was raised through the IPO.  While Rs 1.2 billion was raised through private placement the IPO funding amounted to Rs 280 million.  The plan to build a hotel in Kalpitiya followed a declaration by the previous Government that Kalpitiya would be developed as an integrated tourist zone.  The company not only designed the hotel but also had an EIA completed.  This was intimated to shareholders in the relevant annual reports.

‘However, the Government shelved plans to develop Kalpitiya.  It is almost impossible for a hotel to be viable in a place like Kalpitiya without accompanying development for tourism purposes.  Right now there are two major hotels in Kalpitiya with very low occupancy rates.’

The spokesperson also stated that the money was invested in Colombo Lands PLC as a medium term measure and the shareholders are aware of this.  He further stated that a similar project in Waskaduwa was completed on scheduled simply because the parallel infrastructure development pledged by the then Government was put in place. 

‘The Nation’ learns that other public quoted companies had raised higher amounts (in one case Rs 4 billion and in another Rs 2 billion) from the public for similar purposes with little to show but have nevertheless not warranted mentioned either by the SEC or the Prime Minister.

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