Touchwood harvests more broken promises; winding up move to come up again on 19 March
Friday, 7 March 2014 07:01
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Cheques given by company to investors returned for lack of funds; CEO looking for cash from Chinese investor, OD facility
The much-awaited Touchwood winding-up case was called in the Commercial High Court before Amendra Senevirathna H.C.J. yesterday, where the appearances and the legal representations of the parties were as before.
The cheques issued to the Petitioner and eight other intervening creditors, by the CEO of Touchwood Investments PLC Lanka Kiwlegedara from his personal bank account, were all retuned due to insufficiency of funds in his account. These cheques dated 27 February were presented in open Court to the Petitioner and the creditors by the CEO of Touchwood when the case was called on 27 January.
Being the victims of a huge financial scandal instigated by Mr. and Mrs. Maloney, the founding members of the company Touchwood Investments PLC, the Petitioner and the intervening creditors anticipated the recovery of a portion of their dues by 27 February 2014.
The investors of Touchwood were given many assurances by the company over the years. These assurances came in the form of affidavits sworn by the Directors of the company and dated cheques issued by the company which were dishonoured, proving the insolvent state of the company, compelling the investors to seek Court’s assistance with the hope of recovering their dues.
The trend seems to continue as numerous assurances are given by the company now in open Court and a positive outcome seems to be a remote consequence. Following the footsteps of his predecessors the current CEO too has given many affidavits guaranteeing payment and issued personal cheques which have been returned.
Even at a time it is apparent that the company is not in a position to fulfil its obligations under the terms of settlement proposed by company itself, the Petitioner and the investors continue to hope against all hope in recovering at least a fraction of their hard-earned money invested in the company.
The company filed in Court a list of investors who will be paid by the company. As stated on 25 February 2014 in Court, the company also assured to keep a land as security and file the relevant documents in Court on 6 March, which they failed to do.
The company requested the investors to present the cheques around 3 March despite the cheques being dated 27 February. The cheques that were presented on 3 March were returned nonetheless, and no reasoning was given by the company.
The day before the court date (5 March) the company filed a motion in Court stating that the cheques had been returned due to the insufficiency of funds in the bank account of the CEO as there has been a delay in the remittance of funds from the account of a foreign investor in a bank in China.
The company sought further time to honour the cheques issued and it was also stated that the CEO has requested a temporary overdraft facility from his local bank to honour the said cheques.
The Judge appreciated the fact that in any event an offence has been committed by the CEO of the company as cheques issued from his account have been returned.
Counsel for the Petitioner Avindra Rodrigo insisted on proceeding with the inquiry for the winding-up of the company on 19 March 2014. The company still has the opportunity till 19 March to satisfy its obligations under the terms of settlement. Counsel further stated that in the light of these developments further legal action could be instituted against the company and any other representatives of the company.
Counsel for the SEC submitted that the SEC is carrying out an investigation into the company and has imposed a suspension on alienating any assets of the company and has further requested several Directors of the company to be present at an inquiry.
Counsel Avindra Rodrigo instructed by FJ&G De Saram appeared for the Petitioner while Harsha Amarasekara instructed by Paul Rathnayake Associates appeared for Touchwood Investments PLC.
