Touchwood, in a letter referring to The Sunday Times FT story on August 17 headlined “Touchwood in court petition accused of fudging accounts” says its management has taken serious note of the charges levelled against it by one of its shareholders in an alleged action filed in court of which Touchwood has not received summons on yet.
Touchwood was made aware of such an action by this news article pertaining to its accounts. Touchwood has never deliberately or otherwise “fudged” its accounts. It has always adopted recognised accounting standards in the preparation of its accounts and our shareholders have approved the financial statements each year.
Touchwood adopted the International Accounting Standard 41 agriculture for the valuation of its biological assets using an independent chartered valuers as is done the world over. However, the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) declared that it found the accounts of Touchwood to be non-compliant with the Accounting Standards of Sri Lanka. Acting on this finding, the Securities and Exchange Commission (SEC) issued a directive on Touchwood to re-state its accounts.
Both the finding of the SLAASMB and the directive of the SEC have been challenged by Touchwood in two separate writ applications now pending before the Court of Appeal. The Court of Appeal has also issued a stay order on the SEC staying its directive which requires Touchwood to re-state its accounts. Further elaboration and comment on these cases cannot be made at this stage since they are both pending before court.
Touchwood stands by its accounting practices, which have been verified and approved by its reputed auditors. Touchwood categorically refutes the allegation of “fudging” its accounts as being baseless, unfounded and probably made with an ulterior motive.