Monday, September 12, 2016

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‘Tourism and Water: Protecting our Common Future of Sri Lanka

Original Date of the Article - Tuesday, September 24, 2013
For: World Tourism Day 2013 for Chamber of Tourism and Industry - Sri Lanka 
By Jithendra Antonio

The United Nations World Tourism Organization (UNWTO) celebrates World Tourism Day on September 27 every year.

In line with the 2013 United Nations International Year of Water Cooperation, the 2013 theme for World Tourism Day is ‘Tourism and Water: Protecting our Common Future’. And this year’s World Tourism Day celebrations will be climaxed in the Maldives as the host country and Sri Lanka was the official host country of World Tourism Day in 2007. UNWTO’s membership includes 155 countries, 7 territories and over 400 Affiliate Members representing the private sector, The United Nations World Tourism Organization (UNWTO) is the United Nations agency responsible for the promotion of responsible, sustainable and universally accessible tourism.

The celebration aims at creating further awareness among the international community on the social, cultural, political and economic importance of tourism. It also seeks to address the Millennium Development Goals (MDGs) and to highlight the contribution the tourism sector can make in meeting these goals.
Tourism today is a trillion dollar sector involving the movement of over one billion tourists a year around the world and another five to six billion domestically. As the most widely celebrated global day for tourism, it represents a unique opportunity to raise awareness of tourism’s role in water access and shine a spotlight on the sector’s contribution to a more sustainable water future.
Tourism has proven to provide environmentally sound solutions, as well as political and financial support, for the conservation and sustainable use of water sources. But more must be done. With a record one billion international tourists travelling in a single year in 2012, now is the time to commit to a more sustainable tourism sector in order to protect our common future.

This year’s theme highlights tourism’s role in water access and shines a spotlight on the actions currently being taken by the sector in order to contribute to a more sustainable water future, as well as the challenges ahead.

The Maldives is in fact a very matching to theme as the host country to celebrate as a country covered 99% by water. Official WTD celebrations in the Maldives will include a High-Level Think Tank bringing together public and private tourism stakeholders and water experts to devise policies and strategies aimed at ensuring the tourism sector contributes to protecting water resources.

UNWTO Secretary-General Taleb Rifai in his official WTD 2013 message had said that as one of the largest economic sectors in the world, it is the responsibility of the tourism sector to take a leadership role and ensure companies and destinations invest in adequate water management throughout the value chain.

He had further said that if managed sustainably, tourism can bring benefits to the national and local communities and support water preservation.
Clean, accessible water is vital to tourism, running most of the sector´s businesses, from hotels and restaurants to leisure facilities and transportation. More importantly, wetland tourism is growing, with many of the world’s coastlines, lakes and other wetlands among the most popular tourism destinations.

World Tourism Day will be a unique opportunity to examine the challenges facing water management in tourism and the measures being undertaken by the sector to protect and promote water resources while creating benefits for local populations around water tourism destinations.

Tourism is a major industry that contributes to the economic and social development of Sri Lanka by way of foreign exchange earnings, employment generation, income creation and generation of government revenue. Tourist traffic to the country soared from 1968 onwards until the eruption of ethnic conflict in 1983. Arrival plunged sharply due to the ethnic conflict from that year but arrival increased sharply with the improvement of the security situation in the early 1990s.Since 2009 with the end of War against Terrorism Sri Lanka is now emerging to reap the benefits of a thriving Tourism Industry.

Sri Lanka as a country that is filled with natural water resources as well as manmade water-resources Sri Lanka has more potential to brand itself as premier destination for wetland tourism products in line with this year’s ‘World Tourism Day’ theme. From breathtaking coastlines, rivers, waterfalls, manmade tanks and a lakes and other wetlands, Sri Lanka is could be positioned as a most popular tourism destinations for even water sports.

Sri Lanka's radial network of rivers begins in the central highlands. There are about 103 distinct river basins covering 90% of the island. The southwest quarter of the island has seven major basins with catchment areas ranging from 620 to 2,700 square kilometers. They are: Kelani ganga, Kalu ganga, Maha Oya, Attanagalla Oya, Gin Ganga, Nilwala Ganga, and Bentota ganga. An exception to the above radial pattern is the largest basin, that of the 335-km-long Mahaweli River which has a catchment area of 10,448 square kilometers. After leaving the central highlands, it runs almost north for 90 kilometers (km) from Minipe to Manampitiya and a then further 70 km through several distributaries as far as Verugal and Mutur on the east coast. Most Sri Lankan river basins are small. Only 17 of the 103 basins exceed 1,000 square kilometers. The total runoff in Sri Lanka is estimated at 49.2 cubic kilometers (km3/year).

In fact the surrounding areas in these basins have created an environment for the growth of tourism in the country as many of the rivers and the water falls that are born form their flow paths are major attractions in the country’s natural beauty.

Groundwater resources of Sri Lanka have been extensively used since ancient times for domestic purposes using shallow open wells in almost all parts of the country. Sri Lanka's largest aquifer extends over 200 km in the northwestern and northern coastal areas. There are about 25,000 tube-wells in the country. The quality of the groundwater is generally fairly good and relatively constant throughout the year. However, in some parts of the country (Northern and Northwestern coastal areas) excessive concentrations of Iron and Nitrates (due to agrochemicals and fertilizers) have been reported.

Dams in Sri Lanka are classed according to the materials they use. They are mainly earthen, rockfill, or concrete dams. Earthen dams are the most common type in Sri Lanka, the longest being the Parakrama Samudraya dam which is 13.5 km long and has a storage capacity of 0.12 square kilometers. The highest in this category is the Senanayake Samudraya dam at 44 m and with a storage capacity of 0.95 square kilometers. The Victoria dam, built under the Mahaweli multipurpose project, is the highest concrete (double curvature) dam with a height of 106 m and a storage capacity of 0.73 square kilometers. The gross theoretical hydropower potential in Sri Lanka is estimated at 8,000 Gigawatt hours per year (GWh/year). Still Hydropower accounts for over 90% of electricity generation in Sri Lanka.

Dams, Hydropower plants are also sites of major attraction for locals and the current trends in tourism industry have changed in which many of the generations born to baby boomers are tech-kids who love visiting man made Super and Mega Structures in the modern world. In that context Sri Lanka’s present development drive that includes Mega Structures such as Ports, Airports, Fly-Overs, Highways, Mega Star Class Hotels, Leisure Centres and Cultural Centres, Performing Arts Theatres and Medium and Up market City Centres including Shopping Malls had also boosted countries tourism with local travelers increasing their sightseeing around the Mega Structure sites and foreign travelers also being attracted to those sites.

Further local Government has placed a high priority on providing water supply to urban communities where groundwater is contaminated. Sri Lankan Government spends over US $ 45 million a year in providing piped water to the population. But major tourism oriented cities such as Colombo, Negombo, Mount Lavinia, Habarana, Galle already have many hotels that are managing cleaning plants to process their used water and wastewater and reuse the same water for watering gardens, flower beds, ponds and various other cleaning activities in the hotels and resorts.

On the other hands Sandy Golden Beaches such as Negombo, Mount Lavinia,  Kalutara, Beruwela, Bentota, Pasikudah & Kalkudah, Unawatuna, Mirissa, Weligama, Polhena, Dickwella, Hikkaduwa, Koggala, Tangalle, Trincomalee, Nilaveli, Batticaloa,  Arugam Bay, Casuarina Beach, Kilaaly Beach, Vankalai, and even Kalpitiya are major tourism attraction zones. Those areas have contributed vastly to the economic development of the country and to the boom of country’s tourism industry. And in fact the present government had considered the ‘Tourism’ as a major sector to drive Sri Lanka’s economic growth whilst the several new leisure projects are in the pipeline across Sri Lanka’s coastline. Many of them are 5-star properties and international chains and popular hospitality brands such as Shangri- La, Hilton, Hyatt, Marriott, Mövenpick, Starwood, Raffles, Sheraton, Avic are yet to open some major star class properties in the country.
Country’s tourism authorities are also mulling to promote Sri Lanka as a preferred holiday destination for emerging middle class in two of the world’s largest economies – India and China. During the last two years there is major annual growth in tourists arrivals from China and India whilst from January to August 2013 Chinese visitors to the country had increased by 74.3% to 24,306 and Indian arrivals had increased by 4.9% to 113,541.

The recently implemented online visa system had made it easy for tourists to obtain visa to Sri Lanka and further exemption of the exit pass requirement for Chinese tourists travelling to Sri Lanka, increase in the frequency of Sri Lankan Airlines flights between Sri Lanka and China, the vigorous Sri Lanka promotion campaign and the active presence of Sri Lanka / Chinese tour operators at road shows and tourism promotional events in China have contributed to the increased Chinese tourist arrivals in Sri Lanka.

Sri Lanka has also launched a series of tourism promotional activities in China for the year 2013 including the visits of Chinese journalists to Sri Lanka for Familiarization Tours, a Bus Advertisement Campaign and “Get Sri Lankaned” Campaign in the main cities of China targeting the arrival of 275,000 Chinese tourists to Sri Lanka by 2016.

Sri Lanka's Tourism Promotion Bureau (SLTPB) recently announced that plans are afoot to invite 300 Chinese tour operators on a familiarization tour in the island.
Sri Lanka is also positioning itself to be a major player in the gaming industry hoping to attract more Chinese and Indian gaming enthusiasts with several large Casino resorts yet to come in the commercial capital Colombo whilst world’s famous Casino empires such as Australia based Crown mulling to invest over US $ 350 million in the country.

Country is yet to reap its benefits from the Tourism industries growth potential and be a part of Asian growth story that is happening for the next 100 years of world’s timeline.

Sri Lanka recorded over One Million tourist arrivals for the first time in 2012 and this year so far over 711,400 tourists have arrived to the country as at August 2013. It is a 14.3% increase year on year compared to 622,661 tourist arrivals till August 2012.

However till a majority of tourists arrivals to the country are from the countries in Western Europe which has increased by 13.9% year on year to 281,233 in January –August this year. Over 30,000 travelers arrive to Sri Lanka monthly from Western European countries such as Austria, Belgium, Denmark, Finland, France, Netherlands, Italy, Norway, Spain, Sweden, Switzerland, U.K. and Germany.
Government has earmarked on projects that would develop tourism under sub sections including Fishing Tourism, Deep Sea Diving, Nature Based Tourism, Beach Tourism, Sport and Adventure Tourism, Agro Tourism, Culture Tourism, Village Tourism and Event Tourism. State also have projects in the pipeline such as the Kalpitiya Dutch Bay Resort Development Project that envisage foreign and local mega tourism related investments through leasing out 14 islands spanning over 4100 acres for resort developments on the long term. The project aims to have 17 resorts in 14 islands with 5,000 hotel rooms and 10,000 beds for travelers. The project also has Desalination and Water Provision Methodology that will be introduced to the Hotel Industries at Kalpitiya Islands accordingly further Purified fresh water will be provide to the Development Islands and The Kalpitiya Town from the Water supply Project at Kala Oya – River mouth at Gangewadiya Village. The project alone hopes to provide 15,000 direct employment opportunities and 22,500 indirect employment opportunities.

In September 2011, Ministry of Economic Development officially launched the Tourism Development Strategy for the next five years period of 2011-2016. According to the newly launched Tourism Development Strategy, the main target of the tourism sector until 2016 is to achieve a target number of 2.5 million tourists by 2016.Country is also mulling to increase the number of hotel rooms to 35,000 to accommodate 2.5 million tourists.

Aspiring to become the 'hub of Asia', Sri Lanka is actually an internationally famous country as a value for money destination for MICE activities. MICE is an acronym for Meetings, Incentives, Conferences and Exhibitions.  In this regard The 2013 Commonwealth Heads of Government Meeting (CHOGM) that is scheduled to be held from 15-17th November 2013 in Colombo is considered a larger event that would attract many travelers while giving the boost to country’s image as a top MICE Tourism Destination. This is the first time an Asian country is hosting the summit in 24 years. There are 54 independent states under the belt of commonwealth and many of those already have confirmed their participation.
And Also the Commonwealth Business Forum (CBF) will take place in Colombo, Sri Lanka in conjunction with the Commonwealth Heads of Government Meeting (CHOGM). This is the premier business event in the Commonwealth bringing together Heads of Government, Ministers, and top business leaders from around the world and will be attended by over a thousand delegates.

More than 70 representatives from 15 Commonwealth countries are currently in Sri Lanka on an advance visit to make preparations for their respective delegations for the Commonwealth Heads of Government Meeting (CHOGM) 2013.

Thus the CHOGM could be part of Sri Lanka’s growth story and Tourism as it could be considered an opportunity as many world leaders and top business leaders will be coming to the country.

Sri Lanka had been in the spotlight of many international travel publications around the globe since 2009. Sri Lanka is among the top 10 most affordable destinations in the world, according to the German-language Yahoo! Travel Magazine. In 2010, The National Geographic Channel in an exclusive report categorized Sri Lanka as the second best place to visit. The commentators, Times Travel Writer Jil Crawshow and Editor of Wandertrust Magazine describe Sri Lanka as 'definitely a best place to visit'. The National Geographic Adventure too has ranked Sri Lanka as the Second Best New Trips for 2010 out of 25 countries, accrediting the country as the "Wonder of the World."

Sri Lanka was ranked as the number one tourist destination by the 'New York Times' in its list of "31 Places to go in 2010". Just days after this ranking, a leading lifestyle web resource, Daily Candy, weighed in with a similarly enthusiastic travel recommendation, praising Sri Lanka as "the best place ever been".

The World Travel Market 2011 Industry Report has highlighted five countries including Sri Lanka as the five emerging counties behind the BRICS nations Brazil, Russia, India, China and South Africa.

On January 8, 2011 The CNN Travel Magazine has reported that Sri Lanka is a suitable country for tourists to spend their leisure time.

Sri Lanka was among the best destinations to visit in 2012 National Geographic Traveler, by US-based magazine, which has focused on the island’s hill country. Another monthly travel magazine in Britain ‘Condé Nast Traveller’ has nominated Sri Lanka as one of the top five destinations to watch in year 2012. The travel experts of the magazine have predicted that Sri Lanka will be among the hottest new holiday destinations for travellers in the coming year. Sri Lanka was placed third in the list of destinations ahead of Britain, Australia and Abu-Dhabi .
Meanwhile UK’s most discerning monthly fashion and lifestyle magazine “HELLO” named Sri Lanka as one of the top five destinations to visit in year 2012. In ‘Hello’ Magazin Sri Lanka secured the second place among the top five list selected by the magazine being second only to Thailand.

World’s most renowned and largest travel guide book and digital media publisher –“The Lonely Planet” has named Sri Lanka as number one destination in the world to visit in year 2013. The travel experts and the voters have predicted that Sri Lanka will be on the top of the hottest new holiday destinations for the travelers in year 2013. Under the title  ‘Serenity returns to Serendib “  the travel guide raves destination Sri Lanka describing the multi-faceted experiences the traveler can look for in this small Island , fused with novelty and indulgence .
This year Sri Lanka was also awarded the prestigious “Most Potential Outbound Tourist Destination Award” at the Jinhua Travel New Model Awards Ceremony organized by the Beijing Times on 27 February 2013 in Beijing.

Meanwhile Recently Sri Lanka won an award for Best Travel Destination of Cantonese, based on online voting by the readers of the Southern Metropolis Newspaper.  The award was presented to the Sri Lanka Consulate General on the opening day of the China (Guangdong) International Tourism Industry Expo 2013 (CITE 2013), a one-stop platform for the travel trade, which took place at the China Import and Export Fair Pazhou Complex, Guangzhou from August 29th –September 1st 2013.

Sri Lanka is on course to develop into a major tourist destination. With tourist arrivals crossing one million in 2012, the sector is firmly on track. Leading industry consultants continue to forecast a demand – supply gap in hotel room inventory, a situation that will be beneficial for existing hotels. Analyst also note that in the long term, with the entrance of more international brands and maturing of the tourism industry, Sri Lanka is set to change from a budget destination to a more exotic one offering a variety of experiences to a diverse segment of travelers.

The Tourism sector has been given priority by the Government to push growth and also to earn foreign exchange and the Tourism Development Strategy 2011-2016 continues to support the President's vision of attracting 2.5 Million Visitors by 2016 with additional objectives of attracting US $ 3 Billion of FDI and increasing tourism related employment five-fold to 500,000 by the year 2016.

Monday, August 10, 2015

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Colombo Stock Exchange: Quo Vadis?

Original Date of the Article - Sunday, August 1, 2010
By Jithendra Antonio

After the ending up the three decade war in May 2009, Sri Lanka stepped into a new era of prosperity in development. But in order to give returns to country’s economy and its people one area of development is to encourage capital market investments. So far the government has been creating space for a boom in local capital market whilst discouraging fixed investments in bank deposits due to reduced interest rates.

The Bloomberg News recently reported that with the performance of the All Share Price Index (ASPI) of Colombo Bourse, Colombo Stock Exchange (CSE) was ranked the second best performing stock exchange in the world for the year 2010 to date, a title it clinched during 2009.

The ASPI closed above the 5,000 level for the first time in history last Wednesday July 28 and closed at 5,138.9 gaining 139.8 points (2.8 percent) compared to 4999.05 the previous day. The Milanka Price Index (MPI) gained 159.5 points (2.8 percent) to close the day at 5,828.7, also recording the highest level in history whilst the total turnover recorded during the day was at Rs. 3.2 bn. The market capitalisation at the end of trading on Wednesday was of Rs.1.68 tn which is the highest market capitalisation recorded in the history of the CSE. The ASPI gained 1,753.3 points (51.8 percent) for the year 2010 to date while the MPI gained 1,979.3 points (51.4 percent) for the year to date.

As from August 1 there will be enhanced room for investing community with the reduction of minimum price change (ticker margin) from cents 25 to 10 in the Automated Trading System (ATS) and implementation of reduced transaction costs totaling to .020 percent for transactions up to Rs.50 mn and 0.5125 percent for transactions above Rs.50 mn while the parcel of crossing threshold is set to be increased to Rs.20 mn of a security (exceeding more than 5 percent of the quantity of an issued security) as per directive of Securities and Exchange Commission of Sri Lanka (SECSL) issued on April 30, 2010.

Increased liquidity 
In the wake of developments and amendments in reduced transaction fees from August, many market analysts are of the view, that if the move was to uniformly apply a minimum price change of Rs 0.10 for all orders is also likely to improve liquidity and boost market turnover in coming months.
However, being the second best performing Stock Exchange in the world is something that Sri Lanka should be proud of making it a global brand in capital markets. But on the other hand, still the Colombo Bourse is in a stage where it needs to accompany many companies with a vast sector of business portfolios and a vast number of companies that are into new sectors which could drive country’s development in areas such as bio medical research, retail sales, metal and natural resources mining, renewable power and energy, logistics and transport, petroleum and information technology, telecom and real estate giving many choices to both retail and large scale foreign and local investors, according to capital market experts.

Share trading in Sri Lanka commenced in the nineteenth century when British planters needed funds to set up Tea Plantations in Sri Lanka. The Colombo Share Brokers Association commenced trading of shares in limited liability companies in 1896, involved in setting up plantations. Thereafter, the Colombo Share Market continued operations for almost a century experiencing several vicissitudes due to political and economic factors during the period. A landmark event in the history of share trading in Sri Lanka was the formalisation of the market with the establishment of the “Colombo Securities Exchange (GTE) Limited” in 1985, which took over the operations of stock market from the Colombo Share Brokers’ Association. It was renamed Colombo Stock Exchange (CSE) in 1990.

CSE is a company limited by guarantee established under the Companies Act No. 17 of 1982 and is licensed by the Securities & Exchange Commission of Sri Lanka (SEC). It is a mutual exchange and has 15 full members and 6 Trading Members licensed to trade both equity and debt securities. All members are licensed by the SEC to operate as stockbrokers. All members are corporate entities and some are subsidiaries of large financial institutions.

Demutualisation of CSE
Recently the Watch Dog of the local Capital Market Securities and Exchange Commission of Sri Lanka was in talks to ‘Demutualise’ the CSE from a not-for-profit to a for-profit organisation with another plan to bring in derivatives into CSE.
Since its beginning late 19th century, Colombo Bourse is still mainly housed with plantation, banking, finance, insurance, food and beverages companies with a few blue chips such as John Keels Holdings, Carson Cumberbatch, Distilleries, Hemas Holdings, Hayleys PLC, and Richard Peiris. However, with the recent emergence of new entities, CSE has seen two telecom companies Sri Lanka Telecom and Dialog along with ICT oriented E-Channeling Limited performing at a higher rate of returns during 2005 to 2008 whilst the low performance by technology shares since global financial turmoil was after late 2008. While 2006 to 2008 era was a delisting period of some highly valued stocks the year 2009 brought up a new recovery stage for CSE bringing up new Initial Public Offerings (IPOs) such as Hemas Power in 2009. And in 2010 it made a record with fresh IPOs of family owned enterprises coming to South Asia’s most bullish market with public offerings of Ceylon Tea Brokers, Renuka Agri Foods, Raigam Wayamba Salterns, Vallibel Finance. Now, with coming up of listings of ODEL and PC House, the market will in turn give more opportunities for many investors, small timers and big timers for the next few months.

There are 232 companies representing 20 business sectors on the CSE as at March 31, 2010. The Colombo Stock Exchange is in its ‘teenage’ status in terms of diversity of sector wise corporate equities that are being traded in the bourse. However, recently, with the coming up of many IPOs, there has been a booming capital market drive attracting many investors from even rural areas and further international capital despite the falling interest rates in country’s banking sector and lost confidence in fixed deposits in registered financial industry of Sri Lanka.

Market Manipulation
On the other hand while Sri Lanka’s only Stock Exchange is booming with a fast phase, the regulator, Securities and Exchange Commission of Sri Lanka will also need to introduce new regulations and monitoring to handle the manipulation issues that arise as the capital market grow.

‘Lies, Secrets, Rumors on Market Sentiments. What’s Up, What’s Up, What’s Up?’ asks a Fan Page on world’s popular social networking site Facebook. This fan page titled by ‘CSE Gossip’ is growing in popularity in Facebook attracting more than 1012 fans who are active retail traders on the growing world’s second best performing stock exchange.
As for fans of the page, it is a famous page which gives up to date information on CSE and its equity performance via Facebook while it has a Pivot tool with accurate chart information which are coming from stock brokering firms’ internal information. “I can calculate the resistant and support up to 3 level from their website CG Technicals,” said Chinthaka Gnanasiri.
The fan page itself says “This is an Investor Forum to educate the investors. Buy or sell recommendations will not be provided. Anyone can start a discusion in our wall analyst and others will be helping him. Tool is at” Although the fan page seems to be having a massive number of comments and responses it is hard for anyone in the page to identify the real stock brokering individuals of the country managing it by indirectly creating a push to some stock in the Colombo bourse such as Lanka Cement. If the regulator scanned through the whole history of the page one can easily identify how the stocks were pushed by CSE Gossip on small information that was leaked out based on market performance for the last six months. 
“Meanwhile, 53 percent of Muller and Phipps (MULL) changed hands and will there be a mandatory offer at 1.3 ? We expected the ASI to touch 5200 but it went up to 5192 and turned, hope who followed our analysis might have booked their profits and as per our trend analysis tomorrow closing will confirm us that ASI is going to establish a new trend line or it will continue old trend further.... Await today’s graph by 7p.m to 8 p.m in our website, until then you can see yesterday’s graph... all the best, lets rock and roll”, said CSE Gossip in its status last Thursday.

CSE Gossip
According to Rule No. 12 and 13 of the Securities and Exchange Commission Of Sri Lanka under Rules, published in Gazette Extraordinary no. 1215/2 of December 18, 2001, No person shall create, cause to be created or do anything that is calculated to create a false or misleading appearance or impression of active trading or a false or misleading appearance or impression with respect to the market for or the price of any securities listed in a licensed stock exchange and No person shall by means of purchase or sale of any securities that do not involve a change in the beneficial ownership of those securities, or by any fictitious transactions or by any other means, create a false market in any securities listed in a licensed stock exchange.

Similarly, as amended in 2003 at such events the Commission has the power to suspend or cancel the certificate of registration granted to a market intermediary or the stock brokering individual.

Speaking on the grounds of anonymity, a Senior Investigative officer of SEC said, “If Securities and Exchange Commission find out matter of evidence on such an initiative by stock brokers or any stock brokering individual we will definitely take action on it.” Speaking to The Bottom Line he was of the view that SEC is liable to temporarily suspend or cancel the license of a stock brokering firm or even to blacklist a particular stock brokering individual’s license if convicted in a court of law.
“Even if it is a Director of a listed company or an unlisted businessman or even a staff assistant of a company who is trying to push the market price of a listed security in a manipulative way, we would definitely investigate and enforce action to prosecute them,” said this official from Securities and Exchange Commission of Sri Lanka.
Meanwhile, another fan page on facebook with a website titled and a equity analytical website, had gained investor sentiments on its early news about stock rises. According to one concerned investor, the site has leaked information on April 20 stating “We have been reliably informed by our sources that Galadari family had already entered into an agreement with the Government of Dubai to sell 29 percent of its shareholdings in GHLL as a settlement/structuring of its finances in Dubai. This transaction is expected to take place on the CSE within a short period of time.

Further as a result of this proposed transfer of GHLL shares by the Galadari family the top shareholdings will be shared between Galadari Family, Government of Dubai and locally based Nawaloka Group. It is further rumoured that certain interested parties have already approached Nawaloka Group and Galadari family for a potential takeover bid of the hotel at a price range of Rs 40 per share subject to full write off of the debt owed to the Galadari Family.” And soon by the first week and second week of May Galadari share reached Rs.40 to Rs. 45 which was at Rs.28.50 on April 21. “You can obviously see who are running these websites if you scan and analyse the Colombo Stock Exchange announcements of stock brokers who did the transaction on behalf of the deal and the relation between these website running individuals who are associated to a group company of the same, ”said Dinesh Gunasighe, another investor at Colombo Stock Exchange.

In the same manner, the site has published a report on share warrants titling an example of a made up ‘Goodco’ company (Posted: 19 Jul 2010 09:25 AM Pacific Day Time) quoting that one of the features of warrants is ‘gearing’. This means that a small rise in the price of the share price results in a large rise in the value of the warrants, and a fall in the share price has an equally dramatic downward effect on the value of the warrant. e.g. Goodco’s share price rises 33 per cent from Rs.150 to Rs.200. 
The intrinsic value of the warrant rises from Rs.50 to Rs.100 (a 100 per cent rise). It has also noted that the owner of a warrant does not have to buy the shares. He has a right, not an obligation. Note too that the value of a warrant can quite easily drop to zero (if the exercise price is higher than the share price) and that it will definitely be zero once the time for exercise has passed. So warrants are risky!” said the equity analytics fan page with a headline on ‘Stock Market Manipulation and Share Warrants’. On the same day, Colombo Bourse saw the coming down of GREG share value from Rs.100 to Rs.97.

“Regulator needs to identify who is behind these kinds of malpractices and how they are organised. It is evident if you deeply investigate into these blogspots, and facebook fan pages, that they are run and maintained by Directors of listed companies, some of whom have not even submitted annual reports for years and that they even have links with to stock brokering firms with large volume tradings,” said Saman Fernando an investor of Colombo Stock Exchange. 
According to many investors, in the recent past many websites had been started as blogs to promote Colombo Stock Exchange such as and in a view of outlining investor focus while indirectly pushing the shares of the Colombo Bourse. Investors, in desperation, appeal fr the Regulator to take heed of this threat as it harms the capital market industry.
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Regaining lost Glory

Original Date of the Article - Ceylontoday, 2013-05-22 14:39:00

At the peak of the ‘Ceylinco crisis’ although many of its real estate subsidiaries were affected there is one company that has fully recovered from the crisis and stands strong among all giants in real estate .
‘Trillium Residencies’ the iconic real estate project of City Housing and Real Estate Company PLC (former Ceylinco Housing & Real Estate Company PLC) is one of Sri Lanka’s up-market projects that offers a luxury lifestyle to meet market demand.
The present Chairman of City Housing and Real Estate Company PLC (CH&RE) Janaka Rathnayake who re-engineered ‘The Trillium’ venture to where it stands today, shared his experiences with Ceylon FT.
Janaka Rathnayake
Ratnayake turned around many entities of the collapsed Ceylinco Group when he headed the country’s one of the larger state-owned merchant and investment banks — Merchant Bank of Sri Lanka (MBSL) and converted MBSL into a group of companies with full-fledged savings and insurance arms, extending the bank’s expertise.
Q: Could you tell us about the history of ‘Trillium’?
A: Initially Trillium Residencies was a Rs 3 billion flagship project of Ceylinco Condominiums Ltd, a subsidiary of Ceylinco Housing and Real Estate Company, which is now City Housing and Real Estate Company PLC (CH & RE : Stock Code - CHOU) and approved by the Board of Investment (BoI) of Sri Lanka.
Ceylinco bought the land 10 years ago from Dilmah Tea founder Chairman Merril Fernando, and then Ceylinco Chairman Lalith Kotelawala officially launched the project on 29 October 2004 on the occasion of his 62nd Birthday.
Q: How bad was the company at the time of the ‘Ceylinco crisis’ in 2008?
A: I must first say that the City Housing and Real Estate Company PLC (CH & RE) and Trillium Residencies are the only entities that stand strong to date after the ‘Golden Key tsunami’ washed off the entire Ceylinco business empire.
At the time of Ceylinco Group’s collapse CH & RE had liabilities over Rs 4.5 billion and as usual and in typical Ceylinco Style similar to other financial entities and real estate companies of Ceylinco, CH & RE was also used to accept public deposits engaging in financial activities although it is a real estate company. Under the Lalith Kotelawala led leadership the company then was having a public deposit base amounting to over one billion and was paying more than 20% to 30% unrealistic interest per annum to depositors.
When I took over the company as Chairman I realized by going through the accounts, that almost another one billion rupees was due to be paid to the contractor. Though the company was unprofitable at that stage still there were enormous intercompany and related party transactions that pulled out cash and borrowings.
Q: What else did you see as ‘key indicators’ that lead company to the rugs?
A: The situation was chaotic. Similar to other Ceylinco businesses operating model and culture — the company had highly paid directors. Like rats leaving a sinking ship, in this case too many of those directors quit their board seats but profited by their unofficially and forcefully acquired apartments of the Trillium.
Those director types also did not forget to credit millions of rupees to their accounts as gratuity from a loss making company when they took off to their homes. Former deputy chairperson even had reserved the best apartments of the ‘Trillium’ with a four-room Penthouse without paying the total value for the apartments. But she had been making millions of rupees by renting them to different tenants.
Other directors too reportedly had two to three apartments per director while some directors still claim profits earned from selling the apartment units.
Most of the directors had been paid enormous amounts as emoluments and other perks while at the height of controversy CH & RE and Trillium both incurred Rs 230 million losses with Rs 4.5 billion liabilities.
Q: How were you involved in the rescue operations of this iconic ‘Trillium’ project?
A: I was the time as the chairman of Merchant Bank of Sri Lanka spearheading the management of many distressed companies of Ceylinco including two of the oldest finance companies of Sri Lanka —  The Finance Company Ltd (TFC) and The Finance & Guarantee Company Ltd (F&G). 
The few remaining directors of CH & RE approached me pleading for my expertise and involvement which I first declined to do.
Q: Why did they specifically want you on the board?
A: May be they thought I was a ‘Brand’ to market their business again to rebuild, since I was already handling the management of many other subsidiaries of Ceylinco such as Asian Finance Ltd., Ceylinco Building Society (CBSL), Ceylinco Realty and Investments (CIR), Ceylinco Savings Bank (CSB), Fingara Country Club and the largest private school network of the country Ceylinco Sussex International school and its branches that faced crisis.
Finally after serious consideration, looking at the opportunity to extend my support and my risk appetite, passion for turning around sick companies  I agreed to be the executive chairman of CH & RE.
Q: How far were you involved in the operations of the company?
A: I looked at the entire financials of the company and came up with a business model of my own to recover the business. It was not a ‘formal business plan that was pen-downed on a set of A4 sheets like other CEOs and Chairpersons do, but a practical successful business model ‘that was in my head’ with a realistic time frame to achieve.
In fact in certain situations I infused my personal savings to run day-to-day operations of the company. Subsequently this was also the time as the Chairman of MBSL that I extended my expertise on managing the largest and the oldest financial company in Sri Lanka — The Finance Company PLC (TFC) was incurring over almost Rs 800 million loss per month. The Central Bank of Sri Lanka as the regulator, palmed over the responsibilities to me when Lankaputhra Development Bank failed to manage the situation.
We brought down the TFC loss to Rs 100 million a month at the time of my departure from MBSL. Many of the Ceylinco subsidiaries that were managed with my leadership at MBSL are now under new investors except for a few which are still under litigation in cases related to Golden Key.
Q: Were there any other difficulties that you faced upon recommencing the construction of ‘Trillium’?
A: Unlike in the case of other entities although tasks were very tricky and tenuous at CH &RE at ‘Trillium’ we convinced the contractor to continue to continue with the construction. It is noteworthy to mention that Sanken Lanka extended its fullest corporation to recommence the complete construction of the project.
The last two towers comprising 120 apartments including the sunset wing were to be completed and we wanted another one billion rupees to complete the project.
Not a single bank or a prominent  financial institution was willing to extend even a single rupee as this was part of Ceylinco group of companies ‘a group company brand well known for financial mismanagement during the worst financial crisis we faced in our time’. So we had to find the much needed funds through other ways from various financing sources.
The task that was in our hands was very challenging and we recommenced the project and started the business activities with great difficulty.
Q: How did you settle the financial issues of the company?
A: We followed extraordinary ways for turning around the distressed companies as compared with other risk aversion methods in difficult financial situations.
When we were looking to finance the project the options available at many financial institutions were, squeezing the limited cash flows of the company.
To manage the crisis in the company we first reduced the interest paid to depositors and creditors from 30% to 12%. And we promised that deposits to the value of a billion rupees will be repaid in 36 equal payments. We also negotiated with lenders to amortize the loans. It helped out the company to pay back its loans and interest over a longer period in negotiated installments.
Trillium had borrowed huge chunks of money under the earlier Ceylinco management, some from private lenders mortgaging apartments for half the value. We had a possible chance of losing those apartments unless we settle them at the financier’s own terms.
Q: What did you do after that?
A: Then we started marketing and advertising, since with the post war era the finance sector of our economy was cooling down after the ‘hot fire’ that burned many fingers of stakeholders. The economy was becoming stable and we realized it was time for the demand for high living standards to rise. So we started to re-launch the sale of the project.
It was the right time for sales. The demand for high luxury apartments were rising and unlike other apartment projects Trillium was unique and offering the state-of-the-art living in Colombo metro with convenience and a luxurious lifestyle. Trillium offers spaces, layouts, and design and all the amenities in the best neighbourhood.
Q: Did your work hard for the Trillium payoff?
A: Of course yes; we were able to sell all the apartments and after selling a majority of apartments in the beginning we revised the prices several times with an upward trend and it was profitable to the company.
I must gladly say that company reported a profit after tax of Rs 63.42 million for the nine months ended in 31 December 2012, the highest in its history and 5,501% increase compared to Rs 1.13 million in December 2011.
In addition to the landmark ‘Trillium’ project we launched two other real estate projects one in Wattala and another in Nugegoda.
Q: Don’t you think the progress you made at ‘Trillium’ is an unorthodox business model to revamp similar real estate companies that have been affected by financial crisis?
A: You have got the right understanding. If you actually compare with all the other real estate projects of Ceylinco group to date we have been successful because of the financial management model we followed to rescue the company and its assets.
Five years ago all other Ceylinco companies virtually ran a monopoly in controlling Sri Lanka’s real estate market with over 20 real estate companies and 60 financial companies (regulated and unregulated) and had many projects costing billions that failed to complete and launch the final phase.
Some of these had even fallen into the hands of other investors as a result of which Ceylinco Celestial Towers and Hyatt Hotel, Frances Residencies, Fingara Apartments of F&G, Ceylico Homes International, F&G Continental Residencies, 6th Avenue Apartments, Prominent Residencies, Country Homes Housing Scheme of F&G Property Developers, Eden Garden Housing Scheme, ‘The Sanctuary’ Housing Scheme failed.
Ceylinco group financed all these projects by way of ponzi schemes via Ceylinco subsidiaries accepting public deposits and promising returns from the real estate projects. You can only do that if you are Real Estate Investment Trust (REIT) but in Sri Lanka we do not have any Real Estate Investment Trusts and the law allowing the launching of REITS.
Our business model had only a few steps, the aim of which was the project completion and we had to find low cost project financing and we reduced the cost of funding and borrowing.
We proceeded with the recoveries and revised the prices of apartments to keep up with the market rates, and operations of the company were carried out with the few remaining loyal employees.
As a result we were able to finally complete the project.
And today we should thank the depositors of CH & RE who patiently waited and accepted our repayment schemes without acting similar to other frustrated depositors who opted to act in all sorts of ways to get their investments from other Ceylinco financial companies but ended up getting nothing.
I believe the revival of these two companies could be considered as a benchmark which other companies and entrepreneurs should follow in their business as well.
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Ceylinco in aftermath of 'Golden Key Tsunami'

Original Date of the Article - Sunday, July 25, 2010
Link : 

Lalith Kotelawala used public monies taken from his companies to build his philanthropic image. He directed his seniors over the telephone and millions of rupees changed hands with no paper records

By Jithendra Antonio
Lalith Kotelawala
“Life is either a daring adventure or nothing at all!” A quote by Helen Keller carried on an advertisement by Ceylinco Educational and Financial Services Group in a published national newspaper on October 29, 2008 on 70th birthday of one of Sri Lanka’s then leading philanthropic business tycoon’s, Dr. Deshamanya Lalith Kotelawala. He was the beloved Chairman of one of Sri Lanka’s largest ever conglomerate ‘Ceylinco’ which had about 500 subsidiaries locally and internationally headed by 21 subsidiary groups.

However, on the next two days something that thousands of share holders and creditors of Ceylinco didn’t note was the resignation of Director, Dr. Sicille Kotelawala from hundreds of subsidiaries of Ceylinco including the Golden Key Credit Card Co. Ltd. and the listed entities such as Seylan Bank PLC, Seylan Merchant Bank PLC, Ceylinco Housing & Real Estate Co. PLC, The Finance Co. PLC and Ceylinco Finance PLC. As for the Group’s employees and board of Directors it was a restructuring plan to position for the next phase of Ceylinco’s business strategy while appointing their Chairman as the Founding Chairman of Ceylinco Consolidated that was operating on a ‘Cell Theory of Business’ without any share holding of other subsidiary group companies.

And soon Dr. Kotelawala was gaining popularity once again by late 2008 as a destabiliser of Sri Lanka’s financial industry when he was preaching on mass media that he would take care of depositors of Sakvithi. Although as a shock of a financial tsunami to the whole group, suddenly an unlisted entity of Ceylinco started to collapse day by day with increased depositor withdrawals in the next 48 days. Finally on the December 18, 2008 it was news to all that Sri Lanka’s first credit card company which started in 1980’s was in a run of deposits by customers.

Golden Cash Cow 

Golden Key Credit Card Company Limited was in fact a better positioned entity that continued business for more than two decades offering credit card services while offering a higher interest rate for security deposits compared to the standard interest rates of Sri Lankan financial industry. In fact, the philanthropic image of Dr. Kotelawala alone had been a primary driver to invest in Golden Key and Ceylinco Financial Subsidiaries for country’s other prominent leading businessmen, politicians, cricketers, movie stars, Industrialists, professionals, clergy and even the common laymen. But none of those depositors ever understood that Dr. Kotelawala, along with his Board of Directors, was managing a highly risky financial portfolio behind their collars offering interest rates ranging from 25% to 50% per annum for public deposits. Nobody ever questioned how they could offer such high interest rates when you will hardly find a business that could generate extra 50% as returns to pay back the creditors when the administrative cost and operation cost is deducted from the balance sheet. On January 30, Deputy Solicitor General, Sarath Jayamanne said in Mount Lavinia Court that total deposit base at Golden Key is about Rs. 26 billion. Out of that, Rs.6 billion had been transferred to other companies within the Ceylinco Group and Rs.14 billion misused by the management. He further said 1 billion rupees had been spent illegally and balance Rs.5 billion had been not accounted for.

Sri Lankan economy was resilient for a certain extent from global financial crisis as per economic experts. It was due to the fact that Sri Lanka had a relatively small economy compared to other financial giants. But as soon as the global financial turmoil came into effect; the world started to witness master frauds by people such as Bernard Madoff who mastered US $ 65 billion fraud and Allen Stanford who was involved in US $ 8 billion Stanford Financial Group fraud. Similarly, amidst financial scams in United States, Sri Lankans also witnessed another financial scam on September 2008. It was Sakvithi who came with a higher interest on deposit scheme who disappeared with Rs.5 billion. It is a mystery whether Sakvithi felt that the world economy was going to fall since he disappeared just before the global financial crisis came about becoming an early bird who saved himself from being caught for a Rs.5 billion financial scam.

In the midst of all recent arising liquidity issues in Ceylinco financial subsidiaries, mismanagement issues and depositors’ dilemma, it seems that the liabilities and risks of the balance sheets of crisis hit Ceylinco Consolidated and its Chairman, Lalith Kotelawala’s subsidiaries had been transferred to individually appointed representatives and state owned financial companies or Central Bank to take immediate steps to stabilise the rising matters of Ceylinco.

Lack of Corporate Governance

“Lalith Kotelawala was two images in corporate world, according to a top official from former Ceylinco Consolidated. “one side, he was the great philanthropist who provided employment to thousands of people looking after them like a caring stepfather, did massive charity work and helped the poor. On the other hand, he did not use his personal funds. He used public monies taken from his companies to build his philanthropic image. He directed his seniors over the telephone and millions of rupees changed hands with no paper records,” added our source who wanted to remain anonymous.

According to Business Community and Central Bank in Sri Lanka, Lalith Kotelawala stepped into areas that he knew nothing about. Central Bank of Sri Lanka found the Ceylinco Group to be lacking in corporate governance. Their transactions were not transparent. In the previous financial reports of companies such as The Finance Company PLC you will hardly ever find the related party transactions in a detailed form rather than by a small one sentence that is published in font size 8 at the bottom of page in the notes to the financial statements. “Kotelawala used his legal businesses to do illegal business,” our source said adding that perhaps under one registered company some Ceylinco Group companies operated several unregistered companies.

The Ceylinco Group’s many investments were not giving adequate returns but there was no proper mechanism to monitor this. “Kotelawala was not a fully qualified accountant and had no capacity to understand an in-depth analysis of the accounts. When you are a chairman of such a large number of companies, where can you find the time to read or analyse board papers? He might have delegated it to others, but people who got the powers used them incorrectly”, “ reasoned this Ceylinco Consolidated official.

Some companies did not make a single cent as returns but promised fancy interest to depositors. When one company failed to generate revenue, they borrowed capital from another. It was similar to a ponzi scheme. Robbing Peter to pay Paul. And Asking from Pat to then pay Peter back and Mortgaging assets back to Paul to pay back Pat” he added. In that system Lalith Kotelawala has been helping himself to a stocky slice of his Ceylinco conglomerate’s income.

Super Luxury Life and Political Financing 

“Kotelawala fooled everyone big and small -- including the relatives of a former Minister of Finance. And now he is trying to fool the investigating officers”, the Deputy Solicitor General Jayamanne once told court. It was in fact, true as many Ceylinco subsidiaries accompanied many politicians and island’s top cricketers with higher interest rates for deposits ranging from 30% to 50%. According to an earlier statement at the announcement of restructuring plan of F&G Group of Ceylinco, former F&G Deputy Chairman Mervyn Jayasinghe said that they offered 42% to a former Finance Minister of UNP Government. According to a top official from Ceylinco, Lalith Kotelawala always used to keep the politicians entertained while he was building his high risk financial business empire with billions of public deposits. “He financed millions during the 1994 Presidential Election campaign, and more than Rs.40 million during 2005 Presidential Election, ” said another Ceylinco source who wished not to be identified.

In Lalith Kotelawala’s life story as narrated in biography of Kotelawala by Nayomi Ratnayake Weerasooriya, Kotelawala says how former President Chandrika Bandaranaike Kumaranatunga offered him a VSAT satellite license in Sri Lanka and gave permission to invest Rs.10 million (in Nepal) to setup an insurance company relaxing exchange control policy in Sri Lanka. “She told me in her usually blunt way not to ask again ‘We are short of foreign exchange, she said,’ says Lalith in his life story.

In the same book, he also says how he had to wait for years until the United National Front government in 2002 come into power to obtain approval for Ceylinco Savings Bank. Whilst Dr. Kotelawala also highlights how he obtained a Rs.400 million from then government in 1996 to reconstruct Ceylinco House with a loan by entertaining a Finance Ministry official to a house from Ceylinco housing projects on low interest terms. (reference page 315)

In a 2006 interview with a business weekend paper, Lalith Kotelawala says: “Today, I have many homes, bungalows and holiday homes. Some, I haven’t even seen. I have almost 20 cars, but I can only drive one at a time. I can afford to eat the best food at the best hotels, but I am a diabetic. So I cannot. Money is a tool that can be used to improve lives and I believe that those with money must use it to help others help themselves. It can really help alleviate poverty.” A doctor, formerly attached to Golden Key ENT Hospital, who dressed Kotelawala to look weak at court sessions in the aftermath of Golden Key scam, said that Kotelawala used to comb his hair even with a pure silver made comb until 2009 court sessions which is now in possession of the same doctor.

Whether all this luxury living enjoyed was financed through public deposits is a question that bubbles among Ceylinco Depositors.

Rs.50 billion Mismanaged 

On the other hand, there has been only one company in world history which held its Annual General Meetings in larger public stadiums and playgrounds to address its massive number of shareholders. It was none other than the Reliance Industries of India and soon the Ceylinco Consolidated made history in the world hosting meetings on ‘Repayment Plans’ for thousands of depositors, creditors and investors of its failed 60 odd financial subsidiaries at public stadiums and public playgrounds and road sides. There are approximately 50,000 depositors who are now left away including nearly 9000 Golden Key depositors, 7000 F&G depositors, 7000 depositors of Ceylinco Shriram, 10,000 depositors of Ceylinco Profit Sharing and tens of thousands of depositors who are unable to withdraw their funds from other Ceylinco financial subsidiaries.

As a whole, when taken in to consideration, the total mismanaged portfolio of Ceylinco counts up to more than Rs.50 billion including the Rs.26 billion in Golden Key Credit Card Company, Rs.13 billion in F & G Company, Rs.7 billion in Ceylinco Shriram, Rs.5 billion in Ceylinco Fast Cash, Rs.800 million in Ceylinco Profit Sharing and many other subsidiaries.
However, apart from the mismanaged portfolio Ceylinco Group was the primary controller of local financial industry and the real estate market via its 60 odd financial subsidiaries and about 20 subsidiaries which was into real estate business. Ceylinco Group controlled approximately Rs.300 billion (about US $ 3 billion) worth of public deposits through its commercial bank Seylan Bank PLC, Ceylinco Savings Bank, Ceylinco Development Bank, The Finance Company PLC, Ceylinco Investment and Realty Limited, Ceylinco Building Society, Ceylinco Finance PLC,Seylan Merchant Bank PLC,Seylan Merchant Leasing PLC, Asian Finance Limited and other failed financial subsidiaries. So, the failure of Ceylinco in turn created a domino effect in local financial industry creating a suspicious and confidence lost public community.

Almost after 18 months since Golden Key collapse the bursting question among financial industry experts is, “How long the Ceylinco or other Managing Agents of Ceylinco Financial companies will be able to pay the liabilities of all left away big and small depositors and creditors since it has adversely and indirectly affected the day to day movement financial flows in the local economy. Besides, it has also affected the Real Estate industry and Construction industry in the country.

Meanwhile, certain failed subsidiaries of Ceylinco, Including Finance & Guarantee Company Ltd, The Finance Company Ltd., Ceylinco Investments and Reality Ltd, Ceylinco Building Society, and Ceylinco Sussex College Network, is now under the management of Merchant Bank of Sri Lanka while the depositors of these institutions continue to lobby about unable to get withdrawals of their deposits at maturity since the companies are only allowing them to renew the deposits at maturity and allowed only the interest paid on the deposits.

About 6820 depositors of Golden Key have only received Rs.100,000 per person on May 18, 2010 as per the repayment plan of Central Bank appointed Chartered Committee of Accountants and the creditors of Ceylinco Shriram are yet to receive repayments on 42 month plan, according to Dushanthi Hapugoda of Golden Key Credit Card Limited Aggrieved Depositors Union.

“A person can mismanage his or her own finances, but he has a bounden duty and responsibility not to play around with other people’s money! There is a saying, “You can fool some of the people all the time, all the people some of the time, but not all the people all the time,!” said a depositor of Golden Key whose father died of heart attack. Both her son and father had deposited all their income from inherited property sales of Golden Key.
Lalith Kotelawala built an empire on good public relations, but unregulated internal money transfers among his businesses may give him returns that he did not bargain for.

Kotelawala is now enlarged on bail limiting his travel only to the boundaries in Western Province of Sri Lanka while a warrant has been issued for the arrest of his wife, Sicille Kotelawala, who is said to be in Singapore.

From banking to insurance, credit cards to finance and real estate, travel, healthcare and tourism to IT services, Lalith Kotelawala had a finger in every pie of business. And faster it diversified, according to top financial industry experts
Ceylinco just got a little too big to handle with money flowing freely in all directions. Some feel the group was a disaster waiting to happen like a pack of cards to fall when the ‘Ace’ of the cards, ‘Golden Key’ fell with a fast blowing wind .

It is a mystery on how a great tycoon who reestablished the finance industry in Sri Lanka during the 80’s downturn in financial sector of the country through acquisitions of failed finance companies such as Asian Finance Ltd., Finance & Guarantee Ltd. and Panadura Finance Ltd., has now run into a major crisis in his business empire which was brought down by a Rs.26 billion fraud in a unregulated credit card entity which accepted public deposits. Other firms in the group, which have about 500 subsidiaries and associates, are also being restructured by the regulator or have been offered for sale. The Ceylinco Group also started construction work on Ceylinco Celestial Residencies, a 45-storey luxury apartment tower billed as the island’s next tallest building, work on which is now stalled.

Ceylinco Consolidated, once a flagship which targeted the hearts and minds of people with its ‘bank with a heart’ by assuring the protection of ‘all, big and small’ is now closed. And recently the most valued entity of Ceylinco, Ceylinco insurance company PLC recently appointed a new Chairman, Godwin Perera from a marketing background closing down the Kotelawala reign in Sri Lanka’s oldest insurance company which was started by Cyril E. S. Perera QC (UNP Member Colombo North) and Hugh Weerasekere which was later transferred to Senator Justin Kotelawala and his brother Sir John Kotelawala during Prime Minister Sirimavo Bandaranaike’s time. Senat)Por Justin Kotelawala then gained control of Ceylon Insurance Co. from Mrs. Alice Farmacia Perera, widow of the late Cyril E. S. Perera and positioned and retiled as Ceylinco Insurance with his son Lalith Kotelawala and started a group with 500 subsidiaries being a significant player in Sri Lanka’s economy before finally collapsing affecting the finance industry strangling thousands of depositors, and leaving its impact more for generations in Sri Lanka.