Financial commitments/comparisons, then and now

Two concrete examples of property values, as a guide:



1. Brandix in Seeduwa – In 1977/1978, the same year that Cornel began investing in the Hilton, he bought six acres of marsh land for approx. Rs.2 to 3 million and built Sun-Cornel Textiles Factory, with a Japanese partner. This same factory is now called Brandix – the much hyped-about/spoken of/eco friendly factory. Today, the same six acres, 960 perches is easily worth Rs. 900 million, to a developer, (i.e. Rs. 3 million x 300 times = Rs. 900 million)

2. Around 1985, Cornel paid Rs. 3.5 to four million for No.16 Malalasekara Pedesa, Colombo 7 – about 38 perches. Today, even at Rs. 4 million a perch, this property readily commands over Rs. 150 million, (i.e. over 35 times)

a. From 1978 – 1984, Cornel committed and contributed his personal funds, resources, goodwill and took risks worth over Rs. 150 million for the Hilton. How much is the then Rs. 150 million worth today? Rs. 4.5 billion (approx. 150 x 30 times)

b. In addition, by 15 February 1984, Cornel had paid over Rs.32 million for the lease plus statutory/legal/professional/other payments relating to the lease, as follows:

How much is the then Rs. 32 million worth today? Rs. 3 billion (approx. 32 x 30 times)

    i. Rs. 5 million in August 1983

    ii. Rs. 16 million on 19 January        1984

    iii. Rs.6.36 million on 13 February          1984 How much is the then Rs.32 million worth today? Rs. 3 billion (approx. 32 x 30 times)

c. However, additionally, from 1984 to 2005, Cornel’s financial losses and sacrifices, especially the loss of the Colombo Apothecaries and Cornel’s personal goodwill, would total to, at least, another Rs. 100 million. How much is the then Rs.100 million worth today? Rs. 3 billion (approx. 100 x 30 times)

The total cost of the lease was only Rs. 136 million with a 20% down payment and the balance to be paid in 36 years, with the final instalment/shortfall/interest etc. not due until 2021.

For this contribution from 1978 to 1984, as per list (1), Cornel was entitled to 51% or majority of HDL shares, and certainly did not need the UDA lease. In any event, Cornel did not receive any promotional shares, cost reimbursement, or any credit whatsoever.

Other newspapers claim Cornel recommended a salary of Rs. 400,000 per month for the Chairman of Hilton. At the board meeting, when asked about his (Cornel’s) time, he stated that from the beginning, the Chairman’s salary should have been, at least, on par with the General Manager of the Hotel, and a sum of Rs. 400,000 per month was the scale at that time.

What was not stated in the newspapers is that at the same board meeting, it was recorded that Cornel, from the inception, refrained from taking this Rs. 400,000 per month salary and any other Director’s fees.

This salary, fees, etc. on an annual basis would amount to over Rs. 5 million per year, whereas the annual instalments to the UDA was only Rs.3 million. Cornel was prevented/frustrated, from paying.

As founder Chairman/Managing Director of HDL, Cornel never accepted any salary or fees, from the inception, for over 27 years.

Cornel’s nominee Directors – Ricky Mendis and Nihal Sri Amerasekera – also refrained from accepting salaries.

Further, Cornel, at the beginning did not accept a vehicle/petrol/driver, etc.

The registered offices of HDL, even after 1984, continued to be at Cornel’s own office – No. 16 Alfred Place, Colombo 3 – where the Japanese Director and his staff were housed, free of charge.