Link: http://www.ceylontoday.lk/e-paper.html Ceylon Today - Ceylon FT, 29/09/2013
By Amrith Gunasekara
Amidst local stock market daily traders planning to rock with troubled forestry firm Touchwood Investments PLC on Friday (September 27th) for a second round, Sri Lanka's stock market regulator temporarily halted the trading of Touchwood shares until company come up with proper disclosures amidst various media reports that quoted the newly appointed Chairman of the Company, Lanka Wijendra Kiwlegedara.
Kiwlegedara told a packed Annual General Meeting on Thursday morning that his board will bring value to the company's sharehoders and that he wil bring over Rs.3 billion or US $ 21 million within 3 to 4 months period to the company from various sources including from one of his other businesses that has footing in Gem & Jewellery and from his privately known investors in Singapore, and Thailand.
On Thursday many stock traders were running behind Touchwood with over 48.7 million shares changing hands that rocketed the share price by 45% to close at a high of Rs.5.20 per share. But on Friday with regulator halting the share trading, in late market hours a statement by Touchwood to Colombo Stock Exchange (CSE) said that founder's of the company Roscoe Maloney and his wife Swarna Maloney both have stepped down from their posts as the Chairman and Vice Chairman with effective from 26th September 2013. However the filing also said that Maloneys will continue to be Independent Non- Executive Directors of the company whilst just two days after being appointed to the Board as the Acting Chief Executive Officer of the company, Lanka Wijendra Kiwlegedara was appointed as the Chairman of Touchwood Investments PLC with effect from 26th September 2013.
Maloney's addressed the AGM in a recorded Video broadcasted by Kiwlegedara and his new board whilst Roscoe Maloney's and his wife Swarna Maloney's whereabouts are still unknown according to the people who invested in Touchwood Tree Scheme though company's officials say Maloney's are in Cambodia.
Over 30,000 Sri Lankan investors are awaiting positive sign to recover their capital funds and interest from Touchwood Investments PLC that marketed Thailand and Cambodia Agarwood projects although being only a listed company in Sri Lanka as Touchwood Investments PLC (TWOD).
"Immediately we will infuse Rs.200 million to the company to sette troubled investors and bring the company in to operation" Kiwlegedara told shareholders on Thursday's AGM. However both shareholders of the company and investors have been questioning the credibility of company during last few weeks since the company had failed to settle the matured investments that have even passed several years since maturity.
Kiwlegedara addressing company's shareholders further said that MP deleted Silva and another Solomon Dhammika along with another person named Upali joined the Touchwood Investments PLC as they are personally known to Kiwlegedara and he believed that the new board has the full potential to turn around the company to profitability. Kiwlegedra said he might consider even to acquire 10% of the company after turning around and to offer a share buyback plan to the curerent shareholders as the value of share had drastically dipped during last few weeks.
Kiwlegedara went onto say that after successfull turnaround operation he would be keen to invite Asitha Koralage who earlier resigned from the board (30th August 2013) to head the company again as Koralage had been influential in setting up company's operations in Sri Lanka since inception.
However Kiwlegedara also went onto say that the new board will assure to bring the share value of Touchwood back to Rs.15 whilst his team has no intention to earn money by fluctuations of Touchwood shares in the market untill the company is turned around in which event a new share buy back plan will be on cards.
"We are even worried that regulators of the stock market suspended the share trading and lifted it back with no proper clarrification on the investigations carried out" Kiwlegedara said adding that as a result shareholders suffered whilst in general regulators will keep the investgation going on for several months.
Kiwlegedara further pointed out that several stock market veterans, industrialists and insiders and outsiders had been playing and medaling with Touchwood shares whilst no proper plan of restructuring was on the cards until Kiwlegedara and his team came on board.However when questioned about British American Technologies Chairman Ruwan Silva's appointement on 13th May 2013 to Touchwood as the Principal Consultant and Advisor to the board on assisting the restructuring process, Kiwlegedara said he is not known about any information or role of Ruwan Silva in the resturctring process of Touchwood for last few weeks.
Soon with Kiwlegedara's announcement of new turnaround plan the Touchwood (TWOD) shares that were hovering at Rs.3.10-3.30 levels shot up as high as Rs.5.20 per share on Thursday whilst over 48.7 million changed hands.
However speaking behalf of the shareholders veteran investor K.C. Vignarajah questioned the basis of appointment of new Directors to the board just 2 to 4 days before the scheduled AGM whislt circular to AGM was already passed among investors.Viganarajah said that it was a matter of 'Good Governance Practices' of the company inspite of late disclosures that came to stock market.Lately Touchwood Investments had been delaying disclosures with related to the share sales done by Roscoe Maloney whilst on 25th September company in a dsiclosure titled 'Errata Notice' said that Kiwlegedara's designation which was mentioned as the Business Development Manager should be corrected as Business Development Director.Vignarajah was infact the only shareholder to raise objection towards appointing the new board to the Touchwood Investments PLC.
However speaking on the matter a lady representative of company's secretaries said the appointment of new directors are valid but soon the AGM was concluded it was surprsing as many shareholders witnessed that representative of the corporate secretaries introducing herself for the first time to the Lanka Wijendra the acting CEO of the company on the 26th of September 2013.
"I lost the confidence of this new Touchwood board when I realized that the new Acting CEO Lanka Wijendra who headed the AGM today didn't even know the corporate secreteray who was sitting two seats next to him at the head table" a shareholder who was present till the end of the AGM said.
Meanwhie shareholders also questioned why the company's founding Director and Chairman Roscoe Maloney and his wife Swarna Maloney was not present at the board meeting.
But another shareholder of Touchwood said as Maloneys had been brought into the spotlight of some criminal cases with regards to 'Bouncing of Cheque payments made by the company' it was practically impossible for Roscoe Maloney and Swarna Maloney to be in Sri Lanka.
But Kiwlegedara said as the founders of the company Roscoe Maloney and Swarna Maloney will remain as directors in his team.
According to some investors who invested in Tree Plantations of Touchwood they said Kiwlegadara had been acting as the company's only leftout Director since mid August 2013 although company disclosed to Colombo Stock Exchange that he was appointed to the board with effective from 23rd September 2013.
"Sometimes the managers of the company introduced Kiwlegedara as the only Director in Sri Lanka in late August when I wanted to inquire about my forestry investment that matured year ago which is not settled to date" an investor who wish to remain anonymous said. According to him the company's present CEO Lanka Wijendra and his management team continue say that Roscoe Maloney and his wife had gone to Cambodia to sell a land to get over US $ 1 million funds to Sri Lanka.
"But it was suspicious because when the company's officials say they can't access the documents in Computer system about our deposits and that files had been taken away by Roscoe Maloney when he was going to Cambodia" another forestry investor said. "And I had to scan my certificate and give it to Kiwlegedara and management as they said they can not locate files or access the computers data" he said.
Touchwood had witnessed several ownership chages during last 7 years period in Sri Lanka whilst foreign investors who have made investments in Thailand, Hong Kong, Dubai have questioned how Sri Lankan stock market regulators were able to list Touchwood Investments PLC in Sri Lanka few years ago when the Touchwood investors in Thailand,Hong Kong were leftout with a 'Scandalous' activity by Roscoe Maloney who didn't pay back investors in Thailand and Hong Kong.
Last edited by StockGuru on Sun Sep 29, 2013 11:29 pm; edited 2 times in total