SEC wants specifics from Kalpitiya; directs postponement of requested EGM
Wednesday, 29 April 2015 01:58
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The Securities and Exchange Commission (SEC), which requested Kalpitiya Beach Resort Plc to hold an Extraordinary General Meeting over the future of the company, yesterday asked for a postponement pending the release of specific measures.
In a statement the SEC said it had requested Kalpitiya Beach Resort Plc to postpone the scheduled Extraordinary General Meeting (which was scheduled by the said company in response to a directive of the SEC) by another month from the date of the scheduled EGM.
This was to enable the company to come up with a precise direction on the future course of action on how the company proposed to safeguard minority shareholder interests prejudiced by the delays caused in constructing the resort hotel, Citrus Kalpitiya.
The SEC made this request from the company after perusing the circular issued to 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.
The company, by way of a Prospectus issued to the public, raised approximately Rs. 283 million to partially finance the construction of a resort hotel within the stipulated period of 24 to 30 months. The company gave this undertaking in the Prospectus issued to the public on or about December 2011. The company has been requested by the SEC that in the event the company was 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 had been prejudiced by the failure of the company to carry out its objectives as stated in the Prospectus.
In its original notice calling for an EGM on 8 May, Kalpitiya said it wanted to appraise shareholders on the current position of the company and an alternate course of action with regard to the Citrus Kalpitiya Hotel Development Project.
In the proposed resolution for EGM, the shareholders could agree to consider courses of action including –
1. Await the new Government’s vision and intent to implement the development plans for Kalpitiya with clear timelines so that the company may review the appropriate time to commence the project.
2. Continue to explore possible investor interest that would negate externalities, so that the company would not be dependent on Kalpitiya destination development as promised in the past by the Government.
3. Consider partners who would create unique marketable products that will further ensure occupancy as a standalone hotel such as a golf course and theme parks.
4. To explore the feasibility of an alternative location, within Sri Lanka and the Maldives, as an alternate destination to Kalpitiya for a tourism project.
The Kalpitiya Board has also decided to respond to the SEC with regard to the release to the media of the SEC letter pertaining to the company and the interview with the SEC Chairman and to clarify in writing to the Prime Minister his statement made in Parliament about the company.
