COLOMBO (EconomyNext) – Sri Lanka’s capital markets regulator has ordered Kalpitiya Beach Resort to call an extraordinary general meeting of shareholders to explain what it will do with 283.5 million rupees raised from the public to build a hotel.
The Securities and Exchange Commission said in a statement it took the decision at its commission meeting of March 10 given the "inordinate delay" in Kalpitiya Beach Resort building a hotel in Kalpitiya out of funds raised at a Initial Public Offer.
The SEC said it noted with "grave concern" that Kalpitiya Beach Resorts, in which Dilith Jayaweera and Varuni Amunugama are executive directors, has not built the resort within the stipulated time frame as stated in the IPO.
Disclosures made by the firm and reasons given for the delay "no longer justifies prolonging construction further," the SEC said.
The SEC ordered the Kalpitiya Beach Resorts board to call for an EGM by May 10 to tell shareholders of the "true financial position" of the company and to pass a resolution on an alternative course of action with regards to the money raised from the public.
It also ordered the firm to produce a report from the company auditor with supporting documents so shareholders can make an "informed decision" and vote on the resolution.
The Securities and Exchange Commission said the company had raised 283.5 million rupees in the IPO in November 2011 to part finance building Citrus Kalpitiya, a resort hotel.
Construction was to have been started by December 2011 and completed within 24-30 months with commercial operations of the hotel scheduled to start in early 2015.