Recently released almost two years delayed annual report of Sri Lanka’s Central Bank managed South Asia’s largest private sector workers’ pension fund – Employees’ Provident Fund’s (EPF’s) 2016 annual report highlight’s that although EPF had invested around Rs. 5 billion in a hotel expecting the listing of shares of the investment on Colombo Stock Exchange (CSE) of the hotel prior to the end of 2015, it had not been completed by even the end of June 2017.

Accordingly in the Auditor General’s report of the EPF’s annual report and accounting, under the note 4.3 titled ‘Delayed Projects’ it highlights that “The fund had joined an investment proposals of Hotel Complex proposed to be newly constructed, under the total cost estimate of Rs. 12 billion in collaboration with another two government institutions and a sum of Rs. 5 billion had been used at the end of the year 2013”.

“According to the agreement of the shareholders signed on 04th June 2013 in that respect it was decided that the shares of the company would be quoted in the share market prior to the end of year 2015, but it had not been completed even by the end of June 2017, as construction works had been delayed” the Auditor General’s report notes.

Meanwhile in the EPF’s 2017 annual report it is highlighted under notes 18.1.2 titled ‘Unquoted Equity Securities’ the only investment worth Rs. 5 billion it had made is in Canwill Holdings (Pvt) Ltd.

On the other hand in 2017 annual report of the country’s largest insurer, state owned Sri Lanka Insurance Corporation (SLIC) points out that Canwill Holdings (Private) Limited is the parent entity of Sinolanka Hotels & Spa (Pvt) Ltd and Helanco Hotels & Spa (Pvt) Ltd. Further the SLIC annual report notes that Sinolanka Hotels & Spa (Pvt) Ltd is in the process of constructing the Grand Hyatt Hotel in Colombo. Accordingly report further highlights that SLIC has a 45.95% stake in Canwill Holdings which is in the business of managing or investing in hotel projects. And as per the SLIC’s 2016 annual report the exception has been the Grand Hyatt project, implemented through Canwill Holdings (Pvt) Ltd and its subsidiary Sinolanka Hotels & Spa (Pvt) Ltd (SHSL), which is still not in operation, with construction in progress.

The report says that “SHSL constructed a 47 level skyscraper and is in the process of completing the finishes that will house an iconic 5 star luxury class hotel and serviced apartments” adding that upon completion the hotel will be named “Grand Hyatt Colombo (GHC)”. It further notes that the total GHC project cost has been estimated as approximately US $ 302 million (Rs. 45.3 billion) excluding interest cost (if) and CESS and NBT. The cost incurred at the end of January 2018 was US$ 124 million (Rs. 19.2 billion) which is approximately 42% of the project financial progress. Report notes that however, the physical progress of the projects as it stands now is around 55% and the expected date of completion would be in the mid of 2019.

“The project experienced a temporary slowdown due to the debate on how best the debt capital for balance funding should be procured” SLIC 2017 annual report adds in its’ review that further notes that SLIC has invested in 850 million shares of Canwill Holdings (Pvt) Ltd which is valued at Rs. 8.5 billion (Note 6.2 to the Financial Statements).