According to the ‘Times of India’, Indian High Commission in Colombo had completed all formalities and was in touch with the Sri Lankan foreign Ministry, which has to clear such purchases by any foreign mission.
However, Indian authorities have later learned that the plot has been sold to China National Aero Technology Import and Export Corporation, which is an aircraft manufacturer, (CATIC).
According to the report, CATIC is planning to build a 5-star hotel in the prime plot, while the Indians were planning to build a cultural center.
“While the sale of a plot to the Chinese may seem innocuous, the fact that it may come at the expense of India is likely to further exacerbate India’s growing concerns over Beijing successfully expanding its base in Sri Lanka. India is worried that the Chinese may acquire operational control of projects in the strategic sector like the Hambantota port and airport” added the Times of India report.
However, the report did not quote any Indian official commenting on the matter.
http://www.news360.lk/other/diplomacy/news-sri-lanka-20-08-2012-sale-of-prime-land-plot-in-colombo-to-china-upsets-india-report-778899