Financial Times

Mystery over Misty Mountain's tea ventures
By Duruthu Edirimuni
Misty Mountain Holdings (MMH), which burst into the public eye with a series of announcements about ambitious plans to invest in the tea businesses, such as HVA Lanka and plantations owned by the John Keells and Hayleys conglomerates, has wound up.

The Sunday Times FT was unable to contact Allen Lipscomb, chairman of MMH. Sources said he is believed to have left the country. His office at Bauddhaloka Mawatha, in Colombo 7, has been closed, even though the board is still displayed.

The new tenant, Prakash Rajan, Partner at Tivoli, an interior fabrication company, said MMH has shifted base to Nuwara Eliya. However when The Sunday Times FT contacted the Nuwara Eliya office, which also doubles as his residence, no one answered the phone.

Dr. Ranil Senanayake, who was advising MMH, has left the company and is abroad. MMH's last purported venture with Hayleys Plantations was called off despite the Ministry of Plantations giving the green light to the latter to sub lease estates owned by its subsidiary Talawakele Plantations to MMH.

Tissa Gunatilleke, CEO, Talawakele Plantations said Lipscomb could not come up with the money. "It was a down payment of approximately Rs. 45 million to sub lease three estates of Talawakele Plantations along with certain precautions against labour liabilities and commitments on MMH's part," he said, adding if anyone else can come up with a beneficial proposal, they are willing to negotiate.

It was the same case with the Sale and Purchase Agreement with John Keells Holdings Ltd (JKH) to buy Namunukula Plantations Limited (NPL) early this year, where MMH was unable to comply with the clauses in the contract. This prompted the conglomerate to terminate the agreement. MMH had contracted to a purchase consideration of Rs.400 million for 100 percent of Keells Plantations Management Services (KPMS).

Adding to MMH's failed attempts, the proposed acquisition of HVA Lanka, which is the brand developer of Heladive tea was also called off after the company failed to pay the initial funds.

MMH was planning to use the Heladive brand name and their facility as a launching pad for producing tea on an 'organic forest gardens concept' whereas both KPMS and Hayleys had wanted to capitalise on the market network that MMH supposedly had established in the US and Canada.

Lipscomb was planning to raise funds through an initial public offering to pay up HVA and JKH, but since he had not come up with proper financial data, the stockbrokering firms he had approached had not taken it up.

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