Thursday, 10 October 2013 00:00
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More Directors, CEO quit within two weeks of entry
Latest exits bring total to 13 Directors leaving company
Another new NonExecutive Independent Director appointed
Chairman takes up CEO role
Troubled Touchwood Investments Plc is turning out to be a popular salon, judging by the entries and exits of Directors.
The company yesterday announced the resignation of recently-appointed Director and CEO Dr. Sujeewa Lokuhewa with effect from 7 October. He was first appointed on 27 September.
When he was appointed Lokuhewa was identified as the Director/Group CEO of ETI Regent Group, with expertise in accounts, special management techniques, human resource management and legal aspects.
Another Executive Director S.K. Dhammika has also given notice effective 10 October.
Dhammika was identified as Vice Chairman South Asian (7side) Football Association and Director of Benchmark Education Institute, Matara. He was appointed following the resignation of Independent Director A. Ralph Pereira.
An engineer, Pereira was the ninth Director to quit the TWOD Board since July 2012.
Newly-appointed Chairman Lanka Wijendra Kiwlegedara, who had his own share of switches of seats including a meteoric rise to the top, has assumed the CEO role as well following Lokuhewa’s resignation.
TWOD didn’t give reasons for the resignation of the two Executive Directors.
The company also announced that Chamitha Ranneththi has been appointed as a Non-Executive Independent Director with effect from yesterday.
Ranneththi has been identified as Chairman of RKC Construction and Consultancy Ltd., with expertise in financial consultancy in investment of real estate and management of real estate property and plantation.
With the exits of the CEO and Director, the number of resignations since July 2012 amount to 13. Last week controversial MP Duminda Silva stepped down from the TWOD Board a week after he was appointed. Chairman Kiwlegedara in a filing to the CSE this week denied that Duminda Silva or his father Lal have any advisory role in the Board or the company.
Kiwlegedara became Chairman on 27 September having been Business Development Manager/Director, Executive Director and Acting CEO in a matter of days. This was after TWOD-fame Mr. and Mrs. Maloney stepped down as Chairman and Vice Chairperson/CEO respectively though they remain on the Board. The duo didn’t attend the AGM held on 26 September as they remain overseas.
Now seen as the prime driver of TWOD, Kiwlegedara has been identified as founder and Deputy Chairman of BOI approved mineral export firm Woollm Lanka Ltd., and Managing Director of Asian Investments and Mercantile Services Ltd.
Following winding up action filed by a defaulted customer and supported by 26 others, TWOD has to come up with a repayment plan by 14 October to Commercial High Court. Investigation into affairs of the Company by the Securities and Exchange Commission is continuing as well.
Kiwlegedara is on record that an infusion of $ 21 million was in the offing apart from several other measures to salvage TWOD, which has over Rs. 4 billion in liabilities. Its asset base is over Rs. 8 billion but analysts have questioned their actual value.
TWOD lawyers maintained the company was only facing a cash flow issue and along with revival plans there was no reason for winding up or appointing a provisional liquidator. Apart from lack of funds, customers fear further erosion in assets at TWOD prompting a spate of legal action.
TWOD stock price yesterday gained by 40 cents or 9% to close at Rs. 5 with 22 million changing hands via 1,741 trades.
Touchwood styles itself as the pioneer of the agro-forestry investment industry in Sri Lanka. It specialises in the cultivation of high value exotic tropical timbers as an alternative and sustainable source of forest products (mahogany, vanilla, sandalwood, teak and other cash crops).
As per its 2012/13 Annual Report, TWOD had planted over 400 trees of high-value timber in 2,854 acres spanning 42 plantations in six districts. This is in addition to timber plantations in Thailand for which customer deposits have been taken by the company.
Despite styling itself as pioneer and in business for over a decade, TWOD remains saddled with over Rs. 500 million worth retained losses. Liabilities amounted to Rs. 4.7 billion as at end FY13, up from Rs. 3.7 billion a year earlier.
