Japanese shareholders sue Asia Capital
In a private plaint, Asia Capital PLC’s top officials, directors, and ex-employees face charges for fraud involving dishonestly enticing foreign investors into a hotel project in Galle.
Japanese CC Trust Pte Ltd. is suing Asia Capital PLC’s management and two former employees for cheating and criminal breach of trust, punishable under sections 403 and 398 of the Penal Code. Despite promises, the project wasn’t concluded as agreed, leading to financial loss and deception towards investors.
This latest development follows an article by The Sunday Times Business on January 7th this year, which shed light on some shareholders of Asia Capital requesting a forensic audit on the company’s accounts and past management. The paper reported that the long-standing Japanese shareholders with 15 per cent in the company are demanding their money amounting to US$18 million plus interest and legal fees, aiming for no return on investment.
These developments have escalated into the Japanese shareholders filing a lawsuit against the company in the Fort Magistrate Court charging Asia Capital PLC, its Chairman Yudhishtran Kanagasabai, Managing Director Raju Radha, Directors Stefan Abeysinghe, Shekhar Balasubramaniam, V. Siva Jr., A. D. Ross, Dhammika Swarnasinghe and Stevenson Charles along with two former employees Reyhan Morris and Sadun Thushara Hettige.
Sources close to the company said that the cash of Rs. 790 million brought in by the Japanese company is recorded in the books as published books as payable to CC Trust Pte Ltd.
Upon receiving this money in 2014, the company resorted to issuing 47 per cent of the shares in the Galle Hotel. “On CC Trust’s request, an agreement was signed in 2017 to transfer shares to a payable non-interest loan and for Asia Capital to build and complete the hotel while issuing the 47 per cent shares in the completed hotel. With the economic downturn, they wanted assets instead of Rs. 790 million when lawyers representing the Japanese on two occasions, negotiated with Stephan Abeysinghe and Asia Capital Chairman Paul Ratnayake to obtain three hotels and four apartments, but a minority Japanese shareholder opposed it. Under the new management it was agreed to accept Rs. 790 million on December 23, after which CC Trust went to court,” one company source told The Sunday Times Business on Wednesday.
They said that Asia Capital was in communication with the company till January this year.
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