Being the fund manager of the country’s largest social security scheme – Employees Provident Fund (EPF) - that has nearly Rs. 1.7 trillion or US $ 10.5 billion worth of private sector workers’ hard earned savings of lifetime – Central Bank of Sri Lanka (CBSL) – in a statement on Monday (20^thAugust 2018) said that the CBSL’s Monetary Board has decided to obtain a valuation of EPF’s equity stake in East West Properties PLC largely owned Weligama Hotel Properties Limited (WHPL) that own and operate Weligama Bay Marriot Resort & Spa. CBSL further added that the above valuation process is currently in progress.

In last week Sri Lanka East West Properties PLC (EAST) in a disclosure to Colombo Stock Exchange (CSE) said that further to their previous announcements with regard to a new investor, although the new investor is willing to buy only 100% ownership of Weligama Hotel Properties Ltd, the delay in coming to a decision is the inability of the Employees Provident Fund (EPF) which owns 11.11% of the shares of the company, being unable to come up with a valuation of their shares, despite all accounts and other details being available to EPF through their representative who is in the Board of Directors of Weligama Hotel Properties Ltd.

“We will inform you of the progress of the transactions once we receive a response from the EPF” the East West Properties PLC (EAST) said in the disclosure. In early March this year East West Properties PLC (EAST) informed it has signed a letter of intent to sell the entire stake it owns in its subsidiary, Weligama Hotel Properties Ltd, the property owners of recently opened Weligama Bay Marriott Resort & Spa, to Singapore’s HPL Hotels & Resorts Pte. Ltd. The stock market disclosure filed by the company however, did not give any indication of the possible sale price. (Reporting By Devendra Francis)

Following is the Full Statement issued by the Central Bank of Sri Lanka

Clarification on the EPF’s equity investment in Weligama Hotel Properties Limited (WHPL)

Attention of the Central Bank of Sri Lanka has been drawn to recent media reports and the corporate disclosure to the Colombo Stock Exchange (CSE) by East West Properties PLC, the parent company of Weligama Hotel Properties Limited (WHPL).

 The Employees’ Provident Fund (EPF) Department received a letter from the Chairman of WHPL in June 2018 to sell its stake in WHPL to HPL Properties Group. Subsequently, the EPF Department held several discussions with WHPL in this regard. Accordingly, the Monetary Board of the Central Bank of Sri Lanka has decided to obtain a valuation of EPF’s equity stake in WHPL and the above valuation process is currently in progress.

A comprehensive valuation would be essential to determine the value of EPF’s stake in WHPL prior to divesting, in order to ensure an adequate return to the Fund to maximize the benefits for its members. Therefore, the EPF wishes to reiterate that it has taken necessary measures to obtain a valuation.