Touchwood case one of a kind
The recent state of affairs at the forestry management company, Touchwood is so unique that it’s the first time in the history of the Securities and Exchange Commission (SEC) that extensive complaints of such a nature had come to them, sources close to SEC sad.
Touchwood founded in Sri Lanka in 1999 by Chairman Roscoe A. Maloney has his wife Swarna Maloney as the CEO since last October, when Channa Abeygunawardene resigned as its CEO. The Maloneys’ have started firms identical to Touchwood in Thailand and Cambodia and had transferred liabilities of these firms to Touchwood, these sources said.
“Public holding in the company is nearly 100 per cent. All their funds are depleted. They don’t have money to pay the staff and all operations are more or less halted,” a source told the Business Times.
The SEC on Monday suspended trading for three days from September 10 as a current probe in share trading of the company intensified and the troubled company was ordered not to destroy any documents and stopped from any trading activity. Trading resumed on Friday.
Last week the share trading of the company was suspended for three days due to a preliminary inquiry and on Monday the SEC said it has decided to “commence a fully fledged investigation into the activities of the company based on the preliminary inquiry”.
The company was ordered not to acquire, transfer, dispose, pledge, hire, mortgage, lease or otherwise alienate any ‘non-current assets’ in the balance sheet without SEC approval till the investigation is completed; to desist from destroying, concealing, altering, removing, amending, etc or remove any information that is in the records of the company; and to extend full cooperation to the SEC and its investigators.
Around 2.4 million shares were traded when the suspension came into force. Earlier in the month, legal firm F J & G De Saram announced that the Western Province High Court has listed a petition to be heard on 3 October over winding up Touchwood Investments following an application filed by a customer. It also said “any creditor contributory” to the firm who may want to support or oppose the action could get a copy of the court petition and be present at the hearing.
Touchwood share price dipped to a low of Rs. 1.20 before being suspended when the share was trading at Rs. 1.30, down by 20 cents.
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