Citrus Kalpitiya ordered to hold EGM on delayed hotel project
View(s):The Securities and Exchange Commission (SEC), sequel to complaints by investors over delays in the launch of Citrus Leisure which raised funds more than three years ago, on Friday rapped the owing company Kalpitiya Beach Resort Plc for the long delay.In a letter, the SEC ordered the company to call for an “Extraordinary General Meeting of the Company to appraise the shareholders of the true financial position of the company and to pass a resolution on an alternative course of action with regard to the proceeds of the IPO collected from the general public, on or before 10th May 2015”.
It said the notice of the EGM should be accompanied by a duly attested audit report. Earlier in the week, an unnamed investor sent a letter to the SEC urging it to take action against the company for its inability to start construction after collecting public funds (Rs. 283.5 million) through an IPO in November 2011.
The SEC said the company had said construction would commence during December 2011 and “would be completed with 24-30 months and the commercial operations of the project is scheduled to commence in early 2015”.
“… your company has given an undertaking in respect of utilization of funds in a situation where the project is not carried out, that the company will call for an Extraordinary General Meeting of the shareholders to consider an alternative course of action,” the SEC said.
The SEC said that at its Commission meeting on March 10th it was noted that the hotel company had failed to start construction by the stipulated period and “that the market disclosure made by the company and the reasons given for the delay no longer justifies prolonging the construction any further”.