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Malaysian investors shedding shares in construction firm; new directors coming
View(s):MTD Walkers, a construction firm mired in losses, has two new directors, while a reconstitution of the entire board is expected within weeks, with its Malaysian investors shedding shares, industry sources said.
Both incoming directors are linked with Supreme Global Holdings, which is chaired by R M Manivannan. He is also the head of SupremSAT which claimed to have launched Sri Lanka’s first communications satellite in 2012.The new directors, who joined on December 27 last year (according to a Colombo Stock Exchange filing), are Kumaragewattage Sharm Viraj Fernando and Yogendraprasath Sathiyaseelan. They fill two of three vacancies created by the resignations last year of Niranjan Joseph de Silva Deva-Aditya (Nirj Deva), Albert Rasakantha Rasiah and Hewawasamge Ravindranath Srilal Wijeratne.
Mr. Sathiyaseelan is the Chief Financial Officer of Supreme Global Holdings. Mr Fernando is the Managing Partner of Sharm Fernando Associates. The firm’s Financial Consultant is Sumith Ranwatta, who is also the Managing Director of Chart Business Systems (Pvt) Ltd, the company secretarial firm engaged for some time by the Supreme Group.
By the end of September 30 last year, MTD Walkers had Rs 4.2bn in long-term debt and Rs 23.6 billion in short-term borrowings. Around Rs 22bn is due from trade and other receivables. It has to receive Rs 6bn from the Urban Development Authority alone, for three completed housing development projects.
Mr Sathiyaseelan is expected to be an independent director, according to informed sources. This means a board member who does not have a material or pecuniary relationship with the company for related persons, except sitting fees.
Malaysia’s MTD Capital Bhd holds a 90.78 percent stake in MTD Walkers PLC. The sources said the Malaysian company was no longer interested in funnelling money into the concern and was expected to divest of at least 70 percent of its holding.
“The new investors will later clear the board of everyone and put in their people,” one source said. “The change will take place within this month or there will be continuity issues. As to who the new investors are, even we are not aware. But they will have to pump in at least Rs 3bn into the company to satisfy creditors.” Mr Manivannan, however, is a long-time business partner of Jaya Sudhir Jayaram, a Malaysian businessman fixer who was negotiating on behalf of Lycamobile Chairman Allirajah Subaskaran for a stake in the Edirisinghe Group through a venture called Straits Grid Pte Ltd.
The new investors are likely to maintain a core group of six subsidiaries in the MTD Walkers inventory: CML-MTD Construction Ltd; Walkers Piling Ltd; Walkers CML Properties (Pvt) Ltd which does property development; Walkers Colombo Shipyard; Northern Power Co; and Walkers Trading which deals in equipment.
Around four or five smaller companies, it is anticipated, will be put up for sale or management. There are seven members in the main board. Chief Executive Officers will be required for some of the bigger companies such as Walkers Piling and CML-MTD.
The developments at MTD Walkers point to a huge inflow of monies into the country from what would appear to be connected parties using the same fronts. As the Sunday Times had revealed in the past, the purchase of the Edirisinghe Group also implicated the same group of “investors” tied to a labyrinth of multiple companies.
For instance, the Singapore-registered Blue Summit Capital Management Ltd which tying up the purchase of several Edirisinghe Group companies also has ties to Mr Manivannan. One of Blue Summit’s directors is Omar Siraj M Qandeel.
Mr Qandeel and Mr Manivannan together started up two new companies in 2017: Supremesat Japan (Pvt) Ltd and Supreme Innovation (Pvt) Ltd. They are the initial directors.
Mr Qandeel is listed in documents lodged with the Registrar of Companies (ROC) as Saudi Arabian. His address is given as 3 Temasek Avenue, #26-03, Centennial Tower, Singapore 039190. This was the same address used by Rohitha Rajapaksa, youngest son of the former President, when he purportedly registered a company named Dycer International in Singapore.
The Accounting and Corporate Regulatory Authority of Singapore has no record of this entity. There is, however, a Dycer International with the identical registration number provided to Sri Lanka’s ROC incorporated in the British Virgin Islands.
Dycer held a ten percent stake in SupremeSAT but divested those shares in June 2016. The present shareholders of SupremeSAT are Supreme Global Holdings (Pvt) Ltd chaired by Mr Manivannan and J S Energy Holdings (Pvt) Ltd owned by Mr Jayaram. J S Energy was also first registered to 3 Temasek Avenue, #26-03, Centennial Tower, Singapore 039190.
But it has since “shifted” to another address popular with Mr Jayaram: P O Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (BVI). He also used it when he assumed directorship of a company named The Horton Square (Pvt) Ltd which was set up to build a US$ 250mn mixed-development project in Horton Place, Colombo 7.
The other directors of Horton Square are Mr Manivannan, Renuka Shanmuganathan (the two directors of SupremeSAT) and Alberto de Simone, an Italian with Belgian and Dehiwala addresses. The Horton Place project is stalled without planning permission. Purni Edwards reportedly remains the beneficial owner of 291-perch prime block identified for the venture.
Purni is the wife of Rienzie Edwards who, in December 2016, was indicted along with five others by the US Attorney’s Office for allegedly defrauding victims of more than US$50 million. Ironically, Mr Edwards is Associate Producer of the Chandran Rutnam film “According to Mathew”. Mr Jayaram is one of the Assistant Producers. And over the Palk Strait, in India, Mr Subaskaran has just earned a name for being the “refugee who fled war-torn Sri Lanka” who made Britain his home and became the producer of the most expensive–US$ 75mn–Bollywood film ever made.
Meanwhile, Mr Jayaram also owns a company called Al-Rafidian Holdings (Pvt) Ltd. This is confirmed by Singaporean court papers. Mr Manivannan has stated on record that Al-Rafidian provided satellite acquisition financing to SupremeSAT.
In November, Mr Jayaram was detained by Sri Lanka Customs while trying to smuggle out US dollar notes amounting to US$ 50,000 in his hand luggage. Two others had US$ 50,000 each while the fourth carried US$ 58,000. The BVI address Mr Jayaram regularly lists is common to hundreds of other entities from around the world. In the 2016 International Consortium of Investigative Journalists’ Panama Papers leak, BVI emerged as the most commonly used tax haven by clients of Panamanian offshore financials provider Mossack Fonseca.
Mr Manivannan’s business address at 33 West Tower, World Trade Centre, Colombo 1 is also popular. A large number of companies are registered to it including Ceylon Commodity Impex (Pvt) Limited; Supremeast (Private) Limited; V V M Lanka Minerals (Pvt) Ltd; Ceylon Investment and Venture (Pvt) Ltd; Supreme Ventures (Pvt) Limited; Venmar International (Pvt) Ltd; Dycer International (Pvt) Ltd, Sri Lanka; Singha Lanka Investments (Pvt) Ltd; Supreme Global Holdings (Pvt) Ltd; Supreme Space Investments (Pvt) Ltd which is now defunct; SupremeSAT Investments (Pvt) Ltd; Singha Industrial Investments (Pvt) Ltd; Buyback Mobile (Pvt) Ltd; Supreme Solutions (Pvt) Ltd; Supremesat Japan (Pvt) Ltd; and Supreme Innovation (Pvt) Ltd.
An examination of the group’s activities points to the creation of multiple companies, opaque financial transactions, poor reporting, frequent share transfers and labyrinthine business practices. One concern is how similar named entities are registered in Sri Lanka, the UAE and Singapore with the businesses in Sri Lanka having possible connections to the offshore entities.
For instance, Supreme Global Holdings is also registered in the Middle East at P O box 33582, Al Jazeera, Al-Hamra, Ras Al Khaimah, UAE. A common email address was used for Supreme Global Holdings UAE and the company registered in Sri Lanka.
One of the initial shareholders of The Horton Square (PVt) Ltd is an entity called Paradise Island Holdings Ltd which is also registered to the same UAE location. This is the address of RAK Company Administration FZ LLC or RAKCA which calls itself “the largest Registered Agent for incorporation Offshore & Onshore Company [sic] regulated under Ras Al Khaimah Investment Authority”. Its services include management and administration of offshore companies and establishment of accounts with prime banks in the UAE.
In January 2016, Mr Manivannan and his wife, Vasuki, registered the Orenda Ceylon Foundation ostensibly to provide clean drinking water to rural communities and to uplift their living conditions. It has still not been registered with the National Secretariat for Non Governmental Organisations as required by the Registrar of Companies.
Other companies that use the Temasek Avenue address are Straits Consultancy Ltd and Quantum Ark Technologies BV which is said to have made an advance payment of US$ 1mn towards Mr Manivanna’s satellite project.