Forestry newbies enter ‘tree money’ fray; industry expresses concerns on Touchwood Déjà vu
View(s):Amidst the calamity the beleaguered forestry management company Touchwood Investments Ltd has created, a couple of small scale ‘agricultural investment firms’ are gearing to enter the market, industry sources said.
Expressing concerns that the Central Bank (CB) hasn’t still made an effort to regulate the forestry firms in the country, they are pushing for a monitoring mechanism for these newcomers.
H. Rohana, Chief Executive Director Sadaharitha Plantations Ltd, also a forestry firm, told the Business Times that some of these small timers have ventured to cultivate pepper, coconut and teak. “Some are already advertising to lure customers,” he said, noting that with a forestry firm already in the doldrums, the regulator should step up to monitor this industry as the firms are soliciting cash from clients. In this backdrop it’s imperative to implement monitoring mechanisms to control these firms, he said. “My worry is that directors of these firms aren’t exposed to agricultural practices and forestry management,” he added, warning that there’s a dilemma on whether they have sound financial backing.
“We approached the CB about a year ago having written to them to step in to regulate this industry in a bid to advocate better practices in it and they were quite interested. This was more than one year ago, but still there is no progress,” he added. A senior CB official who didn’t wish to be named said the regulator is facing a manpower crisis and is unable to prepare any regulation pertaining to this area.
Lakshan Dias, Attorney at Law representing some depositors of Touchwood told the Business Times that the regulator should identify all elements required to define standard of legality, taking into account international norms and local circumstances.
Mr. Rohana said that during the recent past the “Commercial Forestry Industry” has come under a lot of blame and scrutiny due to various reasons and has begun to lose its credibility among investors and potential investors – especially after the Touchwood crisis.
He said that lack of transparency and poor management practices adopted by the companies that are operating in the industry and corrupt business practices by companies seeking quick-fix benefits are some reasons that commercial forestry isn’t recognised.“Registering forestry firms with CB will be a welcome move,” he added.