ACap in talks with Japanese shareholders to settle legal battles
Malaysian businessman, founder of the controversial multilevel marketing scheme GoldQuest (GQ) and Asia Capital PLC’s(ACap) 72 per cent shareholder, Vijay Eswaran’s team is in discussion with the company’s Japanese shareholders to settle a host of law suits, officials said.
Mr. Eswaran had also approached a major finance company in Colombo to pledge his stake in ACap to raise money in order to buy the Japanese investors over. But the finance company had rejected the application.
The Japanese, owning 16 per cent in Acap with two Japanese directors on its board, sued for US$ 18 million with interest and legal fees claiming no return on investment since they invested in Acap, eight years ago and lost faith in the senior management and their severe mismanagement. They demanded this over the investments made including in Shinagawa Beach Hotel Balapitiya, Taprobana Hotel Wadduwa, Kosgoda Beach Hotel, Galle Beach CC Trust and Asia Leisure Holdings.
They said this matter will be taken to the Japanese Ministry of Foreign Affairs, Japanese Embassy in Sri Lanka, the Colombo Stock Exchange, and the Securities and Exchange Commission in both Sri Lanka and Japan.
Director/CEO Stefan Abeyesinhe and two Chief Operating Officers, Reyhan Morris and Sandun Hettige are in the senior management. Mr. Abeyesinhe told the Business Times on Wednesday that ACap is currently resolving the matters and their concerns with the Japanese investors amicably and satisfactorily. “Some concerns are already resolved and done. The rest are currently being settled and all will be sorted in the coming weeks.”
Meanwhile in a separate media release, the company said: “We are on the process of relooking and focusing on Asia Capital’s astute investors and our best assets in order to financially re-engineer them to be the key revenue generating assets to sustain the balance sheet with the guidance of our consultant team appointed by our key shareholders.” Referring to the Colombo Stock Exchange (CSE) listing rules which mandates its firms to maintain a minimum public holding requirement on a continuous basis, the release said that Asia Capital must maintain a minimum of 20 per cent (from its now 18.93 per cent) minimum public holding as per the float adjusted market capitalisation and ACap intimated to the CSE that it will do so within the stipulated time.
Kuna Senathirajah, Group Managing Director QI (Quest International) Group in Malaysia (which owns GoldQuest now Qnet Ltd), in a message to the Business Times noted that despite the difficult times the main shareholder is committed to ACap and Sri Lanka and will endeavour to continue attracting investment to the tourism industry and will work hard at helping the industry recover.
Mr. Eswaran entered ACap in May 2009 when he purchased nearly 27 per cent in the company. His GQ operation in the country was strenuously opposed by the Central Bank a few years ago, so much so that the regulator amended the Banking Act to ban multilevel marketing pyramid schemes like GQ.