Ascot Holdings stock exchange disclosure opens flurry of dubious deals

• Company disclaims liability for a mortgage bond issued for its T.B. Jayah Mw. property 

Ascot Holdings PLC last week disclaimed the liability for a secondary mortgage bond, which has been issued under its subsidiary, Ascot Development Private Limited, mortgaging its property on T.B. Jayah Mawatha in Colombo 10 for Rs.350 million to a private commercial bank. 

In a stock exchange filing issued on behalf of its subsidiary, Ascot Holdings said Ascot Development Private Limited is not liable under the said mortgage bond. 
However, it is speculated that the stock market filing by Ascot Holdings was in response to a possible letter of demand it has received from the said private bank to recover the facility obtained mortgaging the said property.  

Ascot Holdings holds Rs.1.1 billion worth of investment property, including the 41.5-perch property off T.B. Jayah Mawatha in Colombo 10, which houses a building with eight floors or of 70,100 square feet and derives an income of Rs.108 million for 12-month occupancy.

The controversial property was one time occupied by Basil Rajapaksa as it housed his most powerful Economic Development Ministry. 

The initial mortgage bond of the property was issued to a state-owned commercial bank. 

On October 24, Ascot Holdings’ top two shareholders, Axis Investments (26.42 percent) and St. Louise Capital Private Limited, which together held a 43.16 percent stake in the firm, exited selling their stakes to a consortium of local and foreign investors for a total consideration of Rs.241.61 million. 

The namesake shareholdings of Axis Investments and St. Louise Capital were on margin accounts provided by the same private commercial bank and the bank was said to have been trying to realise the two investments for some time to settle the outstanding dues.  

Ascot Holdings’ share was in the forefront of an alleged pump-and-dump of shares during the 2010-2012 market bull run.