Sri Lanka threatens Chinese firm with legal action to stop project

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(Reuters) - Sri Lanka will take legal action against a Chinese firm for not halting work on a $1.5-billion luxury real estate project until a probe is completed, a government minister said on Wednesday.

Sri Lanka's new government is reviewing the award of the project to China Communications Construction over allegations the previous administration breached laws and sidestepped environmental rules for the deal.

The project, which risks getting involved in a diplomatic row, involves development of a port city on reclaimed land in the capital Colombo, complete with shopping malls, a water sports area, golf course, hotels, apartments and marinas.

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