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Touchwood depositors band together for legal action
Sun Mar 16, 2014 2:23 am
Amidst a series of regulatory actions, troubled forestry firm Touchwood’s woes are slated to escalate with some depositors banding together to seek justice, some depositors said.
“We are taking legal advice in this regard,” one depositor told the Business Times. He added that they want more depositors of Touchwood to join them.
Amongst those directors who were issued notice of action by the Securities & Exchange Commission (SEC) recently, the controversial Parliamentarian, Duminda Silva’s name may have also figured, according to depositors. He resigned from Touchwood Investments PLC directorate a day after he was appointed.
According to Section 51, Sub Section 3 of the SEC Act, all directors who were on the board during a particular time an offence was committed are all liable for action.
According to Lanka Kiwlegedara, CEO of the company, 19 directors (past and present) were issued notice by the regulator. “Asitha Koralage, Laxman Kulatunga, Pradeep Herath, Jeffrey Ebert, Channa Abeygunawardena, Roscoe and Swarna Maloney and Janath Olaboduwa are amongst the directors who were issued notices by the SEC,” he told the Business Times. He didn’t mention Mr. Silva’s name.
The Colombo Stock Exchange (CSE) on Tuesday suspended trading in Touchwood Investment Plc on a directive by the SEC and this is the third occasion it has been suspended.
CSE transferred the securities of Touchwood Investments PLC to the default board on 21st November 2013 for noon submission of interim financial statements for the quarter ended 30th September 2013. In a March 2, 2014 story headlined “Touchwood investors raise concerns”, the Business Times reported that “questions are being raised on whether authorities should suspend trading in stocks of the troubled forestry firm Touchwood when the company is not fully functional”.
The SEC on Wednesday announced that after deliberating the findings of the investigation report, there may be serious consequences for the investors of Touchwood investments PLC and they have directed Touchwood to desist from acquiring, transferring, disposing, pledging hiring, mortgaging, leasing, creating a charge over or otherwise alienating any non-current assets depicted in the balance sheet of the Company without the prior approval of the SEC. The regulator has also directed them to desist in any manner from destroying, concealing, altering, removing, amending or cause to be destroyed, concealed, altered, amended or removed any information that is in the records or books of the company maintained in the ordinary course of business.
In the winding up application filed in the Commercial High Court of the Western Province, the company sought to be wound up defaulted on the payments to the creditors agreed in court to settle by 28th February 2014. “In lieu of the default payments the Petitioner informed Courts of its intention to proceed with the appointment of a liquidator. Therefore the SEC in considering the potential risk posed to the investors in light of the seriousness of the offences and the circumstance of the winding up application decided to issue the following directive in order to protect the interest of investors till further notice,” the announcement added. The company has been facing a crisis since its founder Ross Maloney and his director-wife Swarna Maloney sold the company to new investors. They are abroad and evading a current probe by the SEC. The SEC said trading will be suspended until the company releases its long-delayed financial results to the market.
One depositor was quoted in a Business Times report recently as saying that no one picked up the phones at the company office. “I found out that their office has been relocated to Nawala from Joseph Lane, Colombo 4.” He raised concerns as to why the regulators are allowing this share to trade on the stock exchange.
SEC is pursuing the Maloney’s on alleged frauds related to inter-company transfer of funds. Last year Touchwood trading was suspended twice but lifted after clarifications by the company.
http://www.sundaytimes.lk/140316/business-times/touchwood-depositors-band-together-for-legal-action-88922.html
“We are taking legal advice in this regard,” one depositor told the Business Times. He added that they want more depositors of Touchwood to join them.
Amongst those directors who were issued notice of action by the Securities & Exchange Commission (SEC) recently, the controversial Parliamentarian, Duminda Silva’s name may have also figured, according to depositors. He resigned from Touchwood Investments PLC directorate a day after he was appointed.
According to Section 51, Sub Section 3 of the SEC Act, all directors who were on the board during a particular time an offence was committed are all liable for action.
According to Lanka Kiwlegedara, CEO of the company, 19 directors (past and present) were issued notice by the regulator. “Asitha Koralage, Laxman Kulatunga, Pradeep Herath, Jeffrey Ebert, Channa Abeygunawardena, Roscoe and Swarna Maloney and Janath Olaboduwa are amongst the directors who were issued notices by the SEC,” he told the Business Times. He didn’t mention Mr. Silva’s name.
The Colombo Stock Exchange (CSE) on Tuesday suspended trading in Touchwood Investment Plc on a directive by the SEC and this is the third occasion it has been suspended.
CSE transferred the securities of Touchwood Investments PLC to the default board on 21st November 2013 for noon submission of interim financial statements for the quarter ended 30th September 2013. In a March 2, 2014 story headlined “Touchwood investors raise concerns”, the Business Times reported that “questions are being raised on whether authorities should suspend trading in stocks of the troubled forestry firm Touchwood when the company is not fully functional”.
The SEC on Wednesday announced that after deliberating the findings of the investigation report, there may be serious consequences for the investors of Touchwood investments PLC and they have directed Touchwood to desist from acquiring, transferring, disposing, pledging hiring, mortgaging, leasing, creating a charge over or otherwise alienating any non-current assets depicted in the balance sheet of the Company without the prior approval of the SEC. The regulator has also directed them to desist in any manner from destroying, concealing, altering, removing, amending or cause to be destroyed, concealed, altered, amended or removed any information that is in the records or books of the company maintained in the ordinary course of business.
In the winding up application filed in the Commercial High Court of the Western Province, the company sought to be wound up defaulted on the payments to the creditors agreed in court to settle by 28th February 2014. “In lieu of the default payments the Petitioner informed Courts of its intention to proceed with the appointment of a liquidator. Therefore the SEC in considering the potential risk posed to the investors in light of the seriousness of the offences and the circumstance of the winding up application decided to issue the following directive in order to protect the interest of investors till further notice,” the announcement added. The company has been facing a crisis since its founder Ross Maloney and his director-wife Swarna Maloney sold the company to new investors. They are abroad and evading a current probe by the SEC. The SEC said trading will be suspended until the company releases its long-delayed financial results to the market.
One depositor was quoted in a Business Times report recently as saying that no one picked up the phones at the company office. “I found out that their office has been relocated to Nawala from Joseph Lane, Colombo 4.” He raised concerns as to why the regulators are allowing this share to trade on the stock exchange.
SEC is pursuing the Maloney’s on alleged frauds related to inter-company transfer of funds. Last year Touchwood trading was suspended twice but lifted after clarifications by the company.
http://www.sundaytimes.lk/140316/business-times/touchwood-depositors-band-together-for-legal-action-88922.html
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