Whilst the main assets of Vallible One were shares that had been transferred by Mr Dhammika Perera of well known Companies, there was a further promise of a huge investment of over US$50M in a 5 star hotel project in Negombo.
The IPO was completely based on the funds needed for this acquisition, and the numbers presented to prospective shareholders were based on the expected cash flows from this investment in the future.
What happened after the IPO? An investment of Rs3B was made in acquisition of Delmege where insiders of Vallible including Nimal Perera made an unconscionable insider dealing profit and was not queried anywhere. Now it is shown that the main asset of Delmege being property has not been collateralized sufficiently to release investment funds, and therefore that investment is actually losing money. Along with that cash drain, the whole Hotel Project has been temporarily shelved with no idea when it will commence.
Simply put, the shareholders of Vallible One, and I am really referring to minority shareholders, as the main shareholders are party to the conspiracy, have been duped of their investment. The SEC MUST make a stand on this and bring the Company to book to at least COMPENSATE small shareholders for the misrepresentation made at the time of the IPO.
It is preposterous that shareholders due to their exalted position are able to dupe innocent people of their savings by making false representations and being able to get away with it without any consequences. It is this sort of pillaging of other people’s savings that take place in a robber baron’s world of the past, which Sri Lanka still seems to be in. It is impossible to draw foreign investors in to Sri Lanka if this example is allowed to go unpunished and it is high time the authorities step in and act. If they do not this will further be an example of politicization of Commerce where there is NO LEVEL PLAYING FIELD from which these people can operate without being held accountable. Let it be an example that no one can get away with fraud, no matter what the position of the person is, if we are to get over this Banana Republic tag and move on to the next level