After nearly five years of legal battles, restructuring efforts, and complex negotiations, Asia Capital PLC one of the first Investment Banks founded in 1991 and listed on the Colombo Stock Exchange (CSE) emerged from one of the most turbulent periods in its corporate history with a negotiated settlement that closes a long-running dispute with its Japanese investors. What once threatened to push the company toward financial collapse has now evolved into a structured resolution that offers a renewed pathway toward stability and survival.
The turning point came following a recent development at the Fort Magistrate’s Court, which discharged a criminal complaint filed by CC Trust Ltd. against Asia Capital on jurisdictional grounds. It marked the second such discharge, effectively ending criminal proceedings without any determination on the substantive allegations. The ruling narrowed the dispute to its commercial dimensions and created space for a negotiated outcome.
Asia Capital PLC is a Sri Lankan investment and financial services company evolved through multiple phases of growth, restructuring, and strategic repositioning within the country’s capital markets. Established as an investment holding and advisory entity, the company initially focused on corporate finance, capital market activities, and investment management, participating in Sri Lanka’s expanding financial sector during periods of economic liberalization. Over time, Asia Capital PLC diversified its interests while navigating regulatory changes, market volatility, and governance challenges that led to significant financial and legal pressures in the late 2010s and early 2020s.
The breakthrough materialised through a mutually agreed settlement between Asia Capital PLC and its Japanese stakeholders, including CC Trust Ltd. and its nominee WS Trust Ltd.. Under the agreement, shares held in River House Ltd., ownership of the River House Hotel, will be transferred as full and final settlement of outstanding obligations between the parties. Both sides agreed to amicably resolve all claims outside the framework of prolonged litigation, bringing closure to a dispute that had spanned multiple jurisdictions and forums.
Company officials describe the settlement as a constructive, dialogue-driven resolution that strengthens the company’s balance sheet while streamlining its capital structure. By containing the asset transfer to a defined component of the group’s holdings, Asia Capital has avoided the broader erosion of its asset base that earlier proposals had reportedly contemplated.
The origins of the dispute date back to events prior to 2020 involving investments made by Japanese stakeholders linked to CC Trust. Allegations were raised against the then management of Asia Capital concerning the handling of funds under a shareholder arrangement, including claims relating to the conversion of US dollar deposits into Sri Lankan rupees. The complaint framed the matter as involving criminal breach of trust and dishonest misappropriation, while Asia Capital consistently maintained that the issues were commercial in nature and subject to contractual interpretation rather than criminal liability.
A decisive inflection point emerged in 2020 when majority shareholder QI Malaysia initiated a comprehensive restructuring programme aimed at stabilising the company and resolving longstanding disputes with foreign investors. As part of this initiative, Managing Director Raju Radha, together with leading advisory firm Frontier Capital Partners Ltd., was brought in as consultants with a mandate to restore operational stability and negotiate a workable settlement framework.
At the height of the crisis, an earlier proposed settlement reportedly contemplated the transfer of all hotel assets owned by Asia Capital PLC to the Japanese investors a move that would have effectively rendered the company asset-light and commercially incapacitated. That proposal was alleged to have been driven by three former directors who were placed under significant pressure by the Japanese investors and their legal representatives in connection with allegations of fraud, ostensibly in an effort to mitigate personal litigation exposure, even at the expense of the company’s long-term viability.
In contrast, Radha’s strategy centred on safeguarding core assets while pursuing sustained and often difficult negotiations. Rather than capitulating to an expansive asset transfer, the revised structure confined the settlement to the River House Hotel, enabling the company to avert financial collapse while progressing toward final resolution. Industry observers note that this recalibration preserved residual shareholder value and prevented what many had viewed as an existential threat.
Throughout the five-year period, Asia Capital faced overlapping litigation, arbitration threats, financial constraints, and reputational pressures. Negotiations with Japanese investors represented by Toshiaki Tanaka continued intermittently alongside court proceedings. Legal and advisory costs mounted on both sides, reflecting the broader reality that prolonged litigation frequently increases financial strain while delaying commercial certainty.
Market commentators view the episode as a cautionary tale in cross-border investment disputes. The experience underscores that commercial disagreements, particularly those involving contractual interpretation and currency exposures, may not always lend themselves to criminal proceedings. More importantly, it demonstrates that structured negotiation and sustained dialogue can achieve practical outcomes where adversarial litigation often prolongs uncertainty.
From the brink of bankruptcy to a negotiated settlement that restores structural clarity, Asia Capital PLC’s journey illustrates the resilience of corporate recovery when leadership prioritises asset preservation, stakeholder engagement, and disciplined negotiation. The resolution not only closes a contentious chapter but also offers the company an opportunity to rebuild confidence, stabilise operations, and chart a renewed course forward.
