Court orders Liquidator to file comprehensive report on Touchwood assets
Thursday, 28 August 2014 00:00
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The case for the winding-up of Touchwood Investments PLC was called in the Commercial High Court of Colombo yesterday.
Heated arguments between the Counsel for the Petitioner, Company and Liquidator continued for nearly two hours when the case was taken up.
Court ordered the Company on the last occasion to hand over all the documents, books of account, and all other documents pertaining to the assets of the Company to the Liquidator by 25 August 2014 by 5 p.m.
Counsel for the Liquidator Hafeel Farisz submitted that certain documents were handed over by the Company but all pertaining to the assets have been conveyed to the investors.
Counsel further stated that no documents pertaining to the freehold property of the Company have been handed over to the Liquidator. It was also stated that the Company has not handed over possession of any other assets movable or immovable.
Counsel also filed a preliminary report by the Liquidator in Court and stated that the said report reflects prima facie the disparities of the documents handed over to the Liquidator. Counsel submitted that the Interim Financial Statements filed by the Company in June 2013 and the Affidavit filed by the present CEO in Court in October 2013 categorically stated that the assets of the Company are worth Rs. 8 billion and when compared with the Statement of Affairs submitted on 25 August 2014, a shortfall of Rs. 6.5 billion is reflected. Counsel also stated that no documents have been given pertaining to the shares worth Rs. 252,668,995 which have been issued by the Company being wound-up.
Counsel for the Company Nihal Fernando PC stated that all the documents in the possession of the Company have been handed over to the Liquidator. The President’s Counsel further stated that the books, documents and computers belonging to the Company have been stolen. It was also stated that the documents related to the Agarwood plantation in Thailand were not available in the Company and had been stolen by the former directors of the Company.
He further defended the present CEO of the Company by stating that the he has no knowledge about the assets of the Company or the documents pertaining to the assets of the Company as all such records had been stolen before he was appointed CEO. Counsel further stated that it is the duty of the Liquidator to find the assets and documents of the Company and take over the business of the Company.
Countering the submission made by the Counsel for the Company, Counsel for the Petitioner Avindra Rodrigo stated that the present CEO could not simply absolve himself of all liabilities stating that he has no knowledge of the goings-on or the records of the Company as he has assumed responsibility for and on behalf of the Company and has represented the Company in the winding-up action.
Counsel further stated that the Liquidator cannot be put on a quest of finding the assets or the records of the Company as it is the statutory obligation of the directors of a Company being wound-up to handover the assets and all other documents to the Liquidator. Upon a winding-up Order being made the onus automatically shifts to the officers of the Company to handover the properties and records to the Liquidator.
Reiterating the submissions of the Liquidator Counsel Rodrigo further stated that not a single asset of the Company has been handed over. Counsel also questioned as to how a public-quoted Company has carried on its business without a single computer or vehicle.
Counsel further reiterated that the Company had disclosed assets worth Rs. 8 billion in the Financial Statements of 2013 and in the Affidavit of the CEO filed in Court in 2013 and that the present Statement of Affairs has only disclosed assets worth approximately Rs. 659 million. Counsel further submitted that the directors of the Company are not acting bona fide and have committed fraud on the investors and reserved his right to make any further applications to Court if and when appropriate.
Court ordered the Liquidator to file a comprehensive report on the assets of the Company when the case is called on 19 September 2014. Court also ordered the liquidator to ascertain any documents pertaining to the assets of the Company such as title deeds from the respective land registry as no such documents have been handed over by the Company.
