Krrish liquidator invites bids for controversial project
View(s):The controversial Krrish project in Fort, Colombo which has residencies and two upmarket global hotel brands, last week invited local and foreign bids to develop the property which has three towers and a podium with a total 10.4 million square feet of space.
The call was made by the property’s court-appointed liquidator G.K. Sudath Kumar in a public notice adding that the project is a large-scale mixed-use development comprising luxury hotel brands – Ritz and JW, branded residencies, office space and a high-end retail mall in one of Colombo’s prime locations.
The project originally promoted by India’s Krrish group was taken over by the government after the former failed to meet deadlines. The Indian entity is also under scrutiny by Indian authorities for financial irregularities.
The Krrish liquidator said the original total project cost was made up of $395 million (84 floors for Ritz hotel and residencies), $125 million (74 floors for JW Hotel and JW residencies), $145 million (94 floors for JW Residencies and office), total construction costing $665 million and design and development $47 million. Construction work by the Krrish company, after securing a 99-year lease from the Urban Development Authority in 2012 for $17 million (Rs. 5 billion), began during the tenure of President Mahinda Rajapaksa
The project has been mired in controversy from day one. Last year on two separate days in February, two fires broke out in the 24th and 35th floors of the incomplete building. Many investors who paid for apartments have appealed to the authorities to restart the project or pay them compensation.
The liquidator has invited offers and proposals to invest and restructure the company or purchase the improvement and leasehold rights of the company under liquidation with submissions closing on February 28.
Under Sri Lanka’s liquidation process, when a company is unable to pay its debt, the directors of the company seek court permission to either wind up the company or declare bankruptcy. An administrator is then appointed, as a first step, to see whether the company can be revived after speaking to all creditors and debtors on restructuring due payments and restructuring the debt. In some cases, resuscitation succeeds, in some cases it won’t.
Meanwhile the Attorney General has filed indictments against Sri Lanka Podujana Peramuna (SLPP) Member of Parliament Namal Rajapaksa, for criminal misappropriation of Rs. 70 million in connection with the controversial Krrish project. The case filed in the Colombo High Court, charges Mr. Rajapaksa with receiving Rs. 70 million from the Indian real estate company for allegedly developing rugby in Sri Lanka. He has denied complicity.
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