Paradise lost is just not cricket for burnt beachfront investors

Posing with Steve Waugh at the Sydney Cricket Ground, Paul Dwyer and Ajit Wijesinghe spruiked their big investment opportunity: a luxury high-rise development on a strip of pristine beachfront in Sri Lanka billed as the first of its kind on the small island nation.

As an icon on the Indian subcontinent as well as in Australia, the legendary Test cricket captain was quite the catch to help market a project that had “all the ducks lined up”, said Dwyer, a Sydney businessman known for owning the former sportswear chain Paul’s Warehouse, at an Asia Tourism and Investment Conference in 2016.

Dwyer and Wijesinghe, a Sydney solicitor and dual Australian-Sri Lankan dual citizen, were attempting to woo attendees to take up a stake in the complex at Balapitiya, a small town 90 minutes’ drive south of the capital Colombo whose attractions include golden beaches and fishing charters, but which is largely off the tourist trail.

Former Australian cricket captain, Steve Waugh (middle), with Ajit Wijesinghe (left) and Paul Dwyer (right).

Operating under the banner of Asian hotel giant Dusit Thani, the development was to feature international restaurants, bars and retail outlets in an idyllic, oceanside setting.

More than seven years later after the SCG showcase, however, the project’s towers are concrete shells, with the venture having ground to a standstill amid a bitter fallout between Dwyer and Wijesinghe, questions over the use of company money and international no-flight orders imposed by a magistrate.

Left behind are dozens of backers, from Australia to Sri Lanka, the US to India, and the UK to Russia, who sank a combined $US20 million-plus buying into the vision of the two Sydney men behind it.

Dwyer and Wijesinghe blame each other for the troubles besetting their company, Indola Group, but investors have been attempting to pursue the pair in Sri Lankan court to get their money back.

The site of the property development in Balapitiya, Sri Lanka, which ran out of funds in 2021.Credit: Pradeep Dambarage 

Questions have been raised about the transfer of more than $2 million from the project into the accounts of other related companies.

Details of the messy dispute are contained in a complaint filed by a Sri Lankan investor with the Colombo Chief Magistrate’s Court in April 2022, eight months after building came to a stop.

In Sri Lanka, criminal proceedings can be initiated directly with the courts by aggrieved or concerned parties and three days after the complaint was lodged, travel bans were slapped on Dwyer and Wijesinghe. This does not mean any crime or misconduct has been proven, but is a safeguard measure put in place by the court.

Dwyer, who was living in Balapitiya, spent the next year-and-a-half unable to leave Sri Lanka before having the no-flight order lifted last December.

He has since returned to Sydney but, as investors also mount civil action, he has resumed travelling back and forth between Australia and Sri Lanka, maintaining he can salvage the development with further foreign funding.

“Each time I go back … I have a no-fly re-issued and I have to go to court to argue for it to be removed,” he said.

“My case is very strong because I haven’t taken a cent that has not been recorded.”

Beachside ambitions

It was while living on Sri Lanka’s picturesque south coast with his partner that Dwyer dreamed up the idea of a beachside hotel and hospitality hub in Balapitiya.

“I’m an Australian. I love beaches. I’m probably very good at identifying great beaches. We thought this was a great beach and we originally thought ‘you know what, let’s put some really nice bars and international restaurants on this site’ so we just bought it,” he told the Asia Tourism and Investment Conference in Colombo in 2016.

Sharing the stage was Wijesinghe, who described it as a “no-brainer” concept.

“If it’s a rainy day in Sri Lanka what do you do? We want to fill that void,” Wijesinghe said.

Seated between them was a vice-president of Dusit International.

Dwyer is known for having owned the Paul’s Warehouse discount sportswear stores, including one in Carlton in Sydney’s south.Credit: Dominic Lorrimer

“We have great trust that this project will be a success,” the hotel company executive said.

Apartments with one, two and three bedrooms were put on sale from $US244,000 and the pitch was that investors would receive 6 per cent interest paid quarterly during construction followed by a share of net profits upon completion.

Buyers would lease their units back to the management company to be used as hotel rooms and receive 21 days free stay per year themselves.

“We go to Sri Lanka a lot, so we thought it’d be nice to go there [Balapitiya] sometimes and lease the place out,” said David Gill, a Melbourne dermatologist, whose wife is Sri Lankan and who put in about $400,000.

Dwyer and Wijesinghe front media in Sri Lanka to promote the development.Credit: Facebook

Other investors were assured by the association with Dusit Thani, which was to manage the hotel upon completion, but has since distanced itself from the development.

“I also invested in one of their hotels in Dubai. So when I saw the one in Sri Lanka I thought that is something serious, something very professional,” said Gregory Catsberg, a Singapore-based executive with a cosmetics company who purchased two apartments in the towers, spending about $US700,000.

An artist’s impression of the planned beachside complex.Credit: Facebook

Hong Kong-based retired housewife Sandhya Chourdia was also assured by the Dusit Thani link. “I saw the first ad on Facebook and then I liked it, and as soon as you press ‘like’ [the sales team] communicate to you personally via Messenger,” she said.

The image of Waugh with Dwyer and Wijesinghe, meanwhile, was published by Sri Lankan media alongside a promotional article saying he endorsed the project. The cricket great was “from memory [paid] a small fee and an agreed [percentage] on sales” to attend the event at the SCG in 2017, according to Dwyer.

“No sales eventuated from that function, so there was minimal involvement,” he said. There is no suggestion whatsoever of any wrongdoing by Waugh, who is not the subject of any legal action over the project. He was only involved in promoting the project. Waugh was contacted for comment.

For a time, everything seemed to be on track. Dwyer and Wijesinghe fronted cameras in Sri Lanka in April 2017 at a soil-turning ceremony attended by Buddhist monks and while the pace of progress slowed after the Easter Sunday terrorist bombings in 2019 and when the COVID-pandemic hit, the promised quarterly interest payments continued to be made to investors.

That was until August 2021, in the lead-up to a devastating collapse of the Sri Lankan economy, when the payments ceased and they were informed of a major dispute between Dwyer and Wijesinghe.

It quickly emerged the project had run dry of cash and building promptly came to a halt, leaving buyers to ask: was their money gone?

The money trail

According to Indola’s latest financial accounts dated March 2020, loans totalling 412,287,702 Sri Lankan rupees, or $2.13 million as converted today, were made from the company to 20 related parties.

Dwyer also admits to borrowing $US400,000 from the company that has not been repaid, while company cash flow statements reveal he was paid a director’s fee of up to $US45,000 a month and Wijesinghe received a monthly payment of up to $US20,000.

A fishing town, Balapitiya boasts golden beaches. Credit: Facebook

The turn of events led investors to begin individually filing civil claims in Sri Lanka to recover at least a portion of what they outlaid.

Dwyer and Wijesinghe have faced no criminal charges and allegations made against them have not been tested in court. There is no suggestion the civil claims against them will be successful.

Dwyer vehemently denies any impropriety. He insists the $2 million-plus in loans to other companies is tied up in land for a second and third stage of the beachfront project and that he can revive it with an equity deal he can strike if Wijesinghe is no longer involved. The unfinished structure and four hectares of land purchased at Balapitiya is worth a combined $20 million.

The project had hit the skids “essentially [because of] a lack of funding, and continual bullshit by my Sri Lankan [business] partner,” Dwyer said.

Dwyer, who points out that it was him who provided company accounts and cash flow statements to investors, told this masthead he received no salary for three-and-a-half to four years before taking a director’s fee, which he said was $US20,000 and rose to $US45,000 “for a couple of months from memory”. He had not paid back the $US400,000 loan, he said, “because Ajit is still in the company”.

“I can repay it the day he is removed,” Dwyer said.

Friends to foes

Dwyer and Wijesinghe met in 1999 during a dispute Paul’s Warehouse had with Nike about his stores selling the sportswear manufacturer’s products at a discounted price. The lawyer he had hired for the Federal Court stoush died, so he brought on Wijesinghe.

“We became friends, as he was my lawyer whom I trusted categorically for 20 years,” Dwyer said in a complaint against Wijesinghe lodged with the Sri Lankan authorities in 2021.

He said in that complaint he and Wijesinghe had set up 18 businesses in Sri Lanka in 2009, the year Dwyer began living in the country. Wijesinghe had a 51 per cent share in all of them while 49 per cent was apportioned to Dwyer, whose stake couldn’t be larger because he wasn’t a Sri Lankan citizen.

The hotel was to be managed by Asian hospitality giant Dusit Thani upon completion.Credit: Pradeep Dambarage

Wijesinghe, whose Sydney firm W Lawyers advises on insolvency and building disputes according to its website, hung up on this masthead when contacted by phone and did not answer subsequent calls and messages or reply to questions sent by email and text.

Dwyer believes court action is being taken against him because some investors want to take over the Sri Lankan project themselves. Dwyer claims to have received two death threats.

Whoever is at fault, buyers have been left enraged. “I was sold the Dusit Thani flat after the dispute already started,” said Hong Kong-based Chourdia, who along with her husband put much of their savings into purchasing an apartment for $US308,000 in July 2021.

Catsberg, who bought his second apartment after being invited to stay with Dwyer at Balapitiya, said the ordeal had caused him a lot of anxiety. “It impacts on your health and your stress levels,” he said. “You work for years to save money.”

In Melbourne, Gill just wants investors to get back what is theirs. “You don’t want to walk away with us losing it all,” he said.

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