Commercial High Court judgment on Touchwood due on Wednesday
Monday, 19 May 2014 00:14
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The Commercial High Court’s ruling on the Touchwood Investments Plc (TWOD) winding up case is expected on Wednesday, a development which analysts describe as being a likely turning-point to ensure good corporate governance and prudent financial management.
All investors of TWOD are eagerly waiting with the hope of recovering their dues through the liquidation of the company, according to a spokesman for parties supporting winding up. The upcoming ruling is anticipated amidst moves by a group of customers separately planning to file complaints with the Criminal Investigation Department (CID) this week.
The Petition to wind-up locally incorporated TWOD was filed in the latter part of July 2013 in the Commercial High Court of Colombo by an aggrieved investor through his lawyers, Messrs FJ & G de Saram, triggered many other investors to intervene and support the winding-up of the company.Many aggrieved investors appeared in Court and recorded their position supporting the winding-up while many others chose to take the backseat and watch the case due to financial constraints. Those, whose entire life savings were guzzled by TWOD had no financial means to resort to litigation.
The magnitude of the fraud surfaced only after the winding-up Petition was filed in Court. Its share trading was suspended by the SEC and a directive was issued restricting the managements of its assets, all of which took place only after the winding-up Petition was filed in Court.
The Spokesman said if not for the bold decision taken by one of the investors, the magnitude of the fraud committed by the company owned by Roscoe Maloney and its management would not have surfaced and the company would have continued its mismanagement and malpractice, misleading not only the public but also the monitoring bodies such as SEC.
“The company is now completely defunct. There is no registered office. The new management of the company has provided a new address in Nawala as its new registered address, where there is no office. The employees of the company whose salaries have not been paid over one year have now dispersed,” the spokesman claimed.
TWOD has last released interim accounts only up to June 2013, which showed a retained loss of Rs. 500 million.
Investors have lost hope in the new TWOD Chief Executive Officer L.W. Kiwlegedara’s promises in reviving the company. TWOD also made history in the legal system of Sri Lanka, by misleading and disrespecting Court by issuing personal cheques from Kiwlegedera’s bank account with the hope of settling the creditors of the company, which were dishonoured.
“If the company is wound-up, all assets will be liquidated and the investors will be paid off. Even though their full investment may not be recovered, the investors are of the view that ‘getting something is better than getting nothing’. If however the company is not wound-up, the management will be given one last golden opportunity to sell the assets of the company to their benefit, with the brand name ‘Touchwood’ entering the list of major financial scandals,” the spokesman alleged.
Those in support of the new management of TWOD however expect the company to be given an opportunity to make good with revival plans as some measures of ensuring stability had been made in the interim period.
