Govt. to acquire a property owned by CSEC

[chinwiTop contributor]

Dunamis capital announced today that they have received an acquisition order from the Government in respect to a property located in Upper Lake Road, Nuwara Eliya.

As per the announcement, they own 76% of the said property and carrying value at cost is Rs. 536 million ( for 76% ownership) and thay have paid 120 million as interest for the capital.

http://www.cse.lk/cmt/uploadAnnounceFiles/4051403058422_611.pdf


Somehow, as per their latest balance sheet, entire property plant and equipment of CSEC was 387 million Rupees.  
? ?

They have not given the Details of the property in CSE announcement.

I think the Govt. is acquiring  Oakley Cottage Holiday Bungalow

Gazette 5/5/2014 Page 14A Top left
Lot No. 1 Oakley Cottage Upper lake Road. Extent 5.2639 Ha
http://documents.gov.lk/Extgzt/2014/PDF/May/1861_6/1861_6s.pdf

Oakley Cottage web site
http://www.seasands.lk/oakley-cottage-nuwara-eliya.php

[slstockVeteran]

First of all, thanks for posting  this Chinwi. I was trying make sense out of this announcement. This is so vague.

Some further question for you if you can
1)  " paid 120 million as interest for the capital."  
What does this mean? CSEC paid interest of 120 Million? ( Is there a loan ?  )
 
2) I don;t know what this ACT says exactly ( great if you can explain)  under what basis this ACT just takes over land and whether they can do it to anyone . anywhere anytime. If so my god.  I guess some people might remember the past from n 1960 /1970 ;-)

3)  Isn't the Government going to compensate closer to their carrying value at all? ( even if they did , wonder how long it takes. Look at Pelawatte case)

If not surely there will be big impairement  whether it is 500 mil or 300 million ( as you pointed there is a mismatch)

I see though Government  said they will compensate,  DIST seems to have written off for Pelwatte ( temporary or permanent).   Seems they are not confident they will get the money?
Same may apply here too right?

[chinwiTop contributor]

1) " paid 120 million as interest for the capital."
What does this mean? CSEC paid interest of 120 Million? ( Is there a loan ? )

I understood it like that.
It says the cost was 536 m and 'interest expensed to date' is 120 million. I thought they got a loan for 536 million and paid interest for it .
Or else they spend another 120 million after acquisition.? Not clear.

2) I don;t know what this ACT says exactly ( great if you can explain) under what basis this ACT just takes over land and whether they can do it to anyone . anywhere anytime. If so my god. I guess some old timers might remember the past ;-) ( am not that old)

UNFORTUNATELY, I have to say Yes.
See the rest of the gazette .
They have to proposed a project and demarcate lands.  That's all.
If they issued a notice under 'section 2' they can occupy the lands and start demolishing or construction even before the completion of acquisition process.
You can go to courts , most of the times to waste more money and your lifetime.
If you have 'connections' that is the best way to deal with, either to stop it or get a good compensation in shorter time. If your place is in a middle of a development project it is very difficult to change the plans. (drawings)

BTW, this particular case is very strange.  I do not know how they created the background (reasoning)  for the acquisition. Still they can.

I remember how President Premadasa acquired No. 321  Galle Rd, Kollupitiya.
( Now Asha phillip is at the 2nd floor)
The place was the residence of famous Ayur Dr. William Alwis. It was an old type big house with nice big garden stretching from Galle Rd to Duplication rd , and all of sudden the Govt. needed it for an 'important development project'.
They acquired it and kept few months and then offered to a friendly Private party. They demolished the house and built 'Lakshmans Building' in that location.

[slstockVeteran]

Thanks. If DIST can;t get their money with so much connections and power, well that speak volumes of the commoner. CSEC might held dry for a while.

I actually condemn more what authorities are doing to the small shareholders of pelawatte. Their investment held for years , no return , no interest and no compensation yet. ridiculous.

Heard cases about how Mrs Sirimavo government took over land just like that.


"They acquired it and kept few months and then offered to a friendly Private party. They demolished the house and built 'Lakshmans Building' in that location."

Seems to be an easy way to obtain prime land for your cronies without sweat.

[sereneTop contributor]

Unfortunately no one is able stand against day light roberies like this.

[HUNTERTop contributor]

Thanks Mr. C. Wi....ra and SLS for the post. I was also wandering about this.

About acquisitions.

Well... 'RichDad' says;
meaning of real estate is actually Royal estate. i.e. estate owned by the royal (rulers).
So, they can do whatever they want with it. We can't help it.
If you need a proof, just avoid paying the assessment tax for few years. Then you will realize who actually own the 'real estate'.