Legal tangle affects Krrish square project
The US$650 million-Krrish square project on the 4.3 acre Transworks house building site in Fort has been temporarily suspended owing to a case pending at the Colombo Magistrate Court and ongoing investigations into an alleged payment of Rs. 70 million (US$ 500,000) to MP Namal Rajapaksa.
The former President’s son was remanded for seven days in connection with the charge and released on bail on July 18.
Considering submissions made by the Ministry of Development strategies and International Trade, the Cabinet Committee on Economic Development (CCEM) has referred the Krrish square project matter to the Attorney General (AG) for its opinion on the status of the project considering ongoing investigations.
The CCEM has directed the ministry not to grant the Strategic Development Project status for the Krrish square project but to give any tax concessions already agreed by the Board of Investment (BOI) and proceed with the project with AG’s concurrence.
Earlier 3.7 acres of land had been cleared by the Urban Development Authority (UDA) to proceed with the Krrish Square project construction work under its first phase, UDA sources revealed.
Construction work at the balance 0.6 acres had been temporarily halted due to a dispute over the final payment (about Rs. 600 million), a UDA official revealed.
This money was alleged to have been given to a go-between in the transaction and the matter is under investigation by the Financial Crimes Investigation Division (FCID).
According to a B report filed by the FCID in the Colombo Fort Magistrate’s Court, an investigation into the manner in which a sum of Rs.70 million received by Namal Rajapaksa from Krrish and later spent by him is continuing under Money Laundering Act.
The alleged pay-offs in the mega mixed development project involving top government personalities at that time were first revealed by the Business Times on July 7, 2013 in an article under the heading “Top Sri Lankan official in the dock over mega Colombo deal”.
The Krrish Transworks Colombo (Pvt) Ltd had earlier planned to build four towers – the tallest tower with 85 floors, the second 80 and the other two -55 floors each, in five million square feet of residential, commercial space and a hotel.
The project has been downsized from its earlier status to two towers under the present circumstances, official sources revealed.
India-based Krrish Group sealed the controversial deal, that drew allegations of huge pay-offs to politicians and officials, signing a lease agreement with the UDA in October last year.
The new agreement, not known to the public until officials revealed it to the Business Times (BT) recently, involves a 3.7 acre block of land slightly smaller in size than the earlier proposed deal.
The UDA official said under the new agreement, 3.7 acres of land has been cleared for the Krrish Square project. The balance 0.6 acres – in the original plan is to be given to Krrish after the settlement of the balance payment now ballooned to over Rs. 800 million with interest – was not included in the latest lease agreement.