The moment Lanka Kiwlegedera, CEO of the troubled Touchwood Investments, took over the organisation, investors in this ‘attractive’ forestry management company felt something amiss.
On the Touchwood website was this ‘accolade’ to Kiwlegedera being referred to as: “One of Sri Lanka’s most eminent corporate personalities”. “Not by a chance,” quipped a frustrated Touchwood investor. The Touchwood chief had also been in trouble before – once being accused in the Magistrate’s Court of Mount Lavinia of unpaid bills.
Their fears were not in vain. In the weeks that followed his take-over of the company from the Maloney couple (Ross and Swarna who are reportedly somewhere in Asia), supposedly with new investors there were musical chair-type appointments on the board. Directors came and went, some functioning for a day. Duminda Silva, parliamentarian and murder case suspect and his father, were appointed directors but stepped down a few days later.
At the last annual general meeting of the company, Kiwlegedera grandly said they had found new investors from Singapore and the company was on a turnaround and the infusion of new capital of over Rs. 3 billion or US$21 million from Duminda Silva’s business partner in Singapore. Ross Maloney even spoke via Skype at the meeting to provide some legitimacy to the event.
Kiwilegedera was appointed executive director, acting CEO and finally chairman/CEO in three separate announcements. He then went on to make totally contradictory statements to the media, lately distancing himself from the Maloneys’ as saying that the company now focuses on its Sri Lanka plantations, and also talking about a Korea investor (what happened to the Singapore investor?).
The Touchwood tentacles spread across Asia with companies or subsidiaries in Hong Kong, Thailand, Dubai, Australia, China, Vietnam and Cambodia, according to court documents.
Finally one investor took the company to court some months back and on Thursday, Touchwood was told to wind up as its assets didn’t match its liabilities. A liquidator is to be appointed to sell off the assets and settle the investors who have bought lots (trees) in Touchwood plantations. In the meantime, trees have been cut at some of the plantations, some with Kiwlegedera’s knowledge, some without, he claims.
No doubt the company, which for all purposes has just two employees (Kiwlegedera and an aide), as seen by Business Times reporters visiting the ‘new’ office on Monday, will contest the ruling in a higher court leading to another protracted period in which investors have to kick their heels for a money-back solution. While court records show that Touchwood has 257 investors in their books in Thailand plantations, how many more are there, is uncertain in Sri Lankan plantations. In fact there are two or three groups of concerned parties (investors) trying to recover their failed investments like the group coordinated by lawyer Lakshan Dias.
Some of these groups are not in favour of liquidation saying that they would like to independently run the plantations and sell the trees at gestation time. The future seems uncertain and bleak for Touchwood investors.
Appeals have been made to the Police to issue an international warrant for the Maloneys’ while the Securities and Exchange Commission (SEC) also wanted to question the Maloney’s over the Touchwood accounts. Touchwood is a listed company in the Colombo Stock Exchange (CSE) and for all purposes, the SEC is reluctant to see the company going ‘down under’ (winding up) as it provides a negative signal to the stock market.
Whether negative or not, regulators need to ensure fly-by-night or cash-grabbing businessmen don’t seek refuge under the CSE umbrella as ‘respected’ companies. The investing public needs to be shown some honesty by the regulating authorities.
Touchwood appears to be anything but a Ponzi scheme (bringing in more depositors/ investors to pay the debts/ exiting investors) like Golden Key and the many finance companies that sprung up in the early to late 2000-2010 period. Some of those companies and their misdeeds would soon find cover under the financial sector reforms when they merge with stronger entities, leaving the latter the burden of clearing the debts.
Ironically why the Central Bank has on one hand repeatedly, in recent years, run newspapers advertisements warning the Sri Lankan public against Ponzi schemes and explaining what a Ponzi scheme is, on the other hand many licenses have been issued to dubious finance companies which have collapsed and waiting now (thankfully) to be swallowed by bigger entities. There are a few crises that have been ongoing for many months with depositors suffering in silence, some even dying for want of their deposits like those at the CIFL (Central Investments and Finance Ltd) whose former top promoter Deepthi Perera, is on the run. Until a few weeks ago, depositors were still housed outside the CIFL premises in Colombo, hoping for relief from an organization that showed ‘respectability’ and drew deposits from the public. Consider this report in the Sunday Times Business dated September 17, 2007: “Central Investments & Finance Ltd (CIFL) has announced the appointment of Professor L.R. Amarasekara as the new chairman of the company effective September 10. Deepthi Perera who was the Chairman earlier resigned from the Board due to personal reasons, the company said. The Board of Directors at a special meeting held last week decided to appoint Prof. Amarasekara as the Chairman of CIFL. Prof. Amarasekara is a consultant Physician and has over 20 years of experience in the financial sector. Shirley Perera is the Deputy Chairman of CIFL. In addition to them, CIFL has a wealth of financial experts on the board like H. P. J. De Silva, first CEO / General Manager of Sampath Bank, H.G.C. Rodrigo, fellow member of Institute of Chartered Accountants, Roshan Egodage, former Deputy Chief Executive of The Finance Company PLC, Gamini Sarath, former Director / CEO of Bankers Training Institute and Sharm Fernando, a lawyer and a banker.”
Where are all these respected individuals who lent their name to provide credibility and soundness to induce people to invest in the CIFL? The regulators need to take stock of those being appointed to banks, finance companies and deposit-taking institutions and ensure that such parties, instead of being mere directors, are also held accountable for the dealings of the organization.
The Touchwood saga is one that kicked off in the early 2000s’ when the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) had a problem with its accounts. However in a subsequent court case, the company was cleared of any irregularity in its accounts. The Maloneys, who launched the company offering huge returns on investment in forestry plantations, subsequently sold a major stake to LOLC which ran the company and appointed veteran banker Rienzie Wijetillake as the chairman. He stepped down in July 2012 after LOLC began easing out of the shareholdings, bringing back Maloney, then the largest single shareholder, as the chairman.
Maloney was also approved by the Central Bank as the investor to revive the CIFL, promising foreign cash to end that company’s woes. The rest is history.
www.sundaytimes.lk
On the Touchwood website was this ‘accolade’ to Kiwlegedera being referred to as: “One of Sri Lanka’s most eminent corporate personalities”. “Not by a chance,” quipped a frustrated Touchwood investor. The Touchwood chief had also been in trouble before – once being accused in the Magistrate’s Court of Mount Lavinia of unpaid bills.
Their fears were not in vain. In the weeks that followed his take-over of the company from the Maloney couple (Ross and Swarna who are reportedly somewhere in Asia), supposedly with new investors there were musical chair-type appointments on the board. Directors came and went, some functioning for a day. Duminda Silva, parliamentarian and murder case suspect and his father, were appointed directors but stepped down a few days later.
At the last annual general meeting of the company, Kiwlegedera grandly said they had found new investors from Singapore and the company was on a turnaround and the infusion of new capital of over Rs. 3 billion or US$21 million from Duminda Silva’s business partner in Singapore. Ross Maloney even spoke via Skype at the meeting to provide some legitimacy to the event.
Kiwilegedera was appointed executive director, acting CEO and finally chairman/CEO in three separate announcements. He then went on to make totally contradictory statements to the media, lately distancing himself from the Maloneys’ as saying that the company now focuses on its Sri Lanka plantations, and also talking about a Korea investor (what happened to the Singapore investor?).
The Touchwood tentacles spread across Asia with companies or subsidiaries in Hong Kong, Thailand, Dubai, Australia, China, Vietnam and Cambodia, according to court documents.
Finally one investor took the company to court some months back and on Thursday, Touchwood was told to wind up as its assets didn’t match its liabilities. A liquidator is to be appointed to sell off the assets and settle the investors who have bought lots (trees) in Touchwood plantations. In the meantime, trees have been cut at some of the plantations, some with Kiwlegedera’s knowledge, some without, he claims.
No doubt the company, which for all purposes has just two employees (Kiwlegedera and an aide), as seen by Business Times reporters visiting the ‘new’ office on Monday, will contest the ruling in a higher court leading to another protracted period in which investors have to kick their heels for a money-back solution. While court records show that Touchwood has 257 investors in their books in Thailand plantations, how many more are there, is uncertain in Sri Lankan plantations. In fact there are two or three groups of concerned parties (investors) trying to recover their failed investments like the group coordinated by lawyer Lakshan Dias.
Some of these groups are not in favour of liquidation saying that they would like to independently run the plantations and sell the trees at gestation time. The future seems uncertain and bleak for Touchwood investors.
Appeals have been made to the Police to issue an international warrant for the Maloneys’ while the Securities and Exchange Commission (SEC) also wanted to question the Maloney’s over the Touchwood accounts. Touchwood is a listed company in the Colombo Stock Exchange (CSE) and for all purposes, the SEC is reluctant to see the company going ‘down under’ (winding up) as it provides a negative signal to the stock market.
Whether negative or not, regulators need to ensure fly-by-night or cash-grabbing businessmen don’t seek refuge under the CSE umbrella as ‘respected’ companies. The investing public needs to be shown some honesty by the regulating authorities.
Touchwood appears to be anything but a Ponzi scheme (bringing in more depositors/ investors to pay the debts/ exiting investors) like Golden Key and the many finance companies that sprung up in the early to late 2000-2010 period. Some of those companies and their misdeeds would soon find cover under the financial sector reforms when they merge with stronger entities, leaving the latter the burden of clearing the debts.
Ironically why the Central Bank has on one hand repeatedly, in recent years, run newspapers advertisements warning the Sri Lankan public against Ponzi schemes and explaining what a Ponzi scheme is, on the other hand many licenses have been issued to dubious finance companies which have collapsed and waiting now (thankfully) to be swallowed by bigger entities. There are a few crises that have been ongoing for many months with depositors suffering in silence, some even dying for want of their deposits like those at the CIFL (Central Investments and Finance Ltd) whose former top promoter Deepthi Perera, is on the run. Until a few weeks ago, depositors were still housed outside the CIFL premises in Colombo, hoping for relief from an organization that showed ‘respectability’ and drew deposits from the public. Consider this report in the Sunday Times Business dated September 17, 2007: “Central Investments & Finance Ltd (CIFL) has announced the appointment of Professor L.R. Amarasekara as the new chairman of the company effective September 10. Deepthi Perera who was the Chairman earlier resigned from the Board due to personal reasons, the company said. The Board of Directors at a special meeting held last week decided to appoint Prof. Amarasekara as the Chairman of CIFL. Prof. Amarasekara is a consultant Physician and has over 20 years of experience in the financial sector. Shirley Perera is the Deputy Chairman of CIFL. In addition to them, CIFL has a wealth of financial experts on the board like H. P. J. De Silva, first CEO / General Manager of Sampath Bank, H.G.C. Rodrigo, fellow member of Institute of Chartered Accountants, Roshan Egodage, former Deputy Chief Executive of The Finance Company PLC, Gamini Sarath, former Director / CEO of Bankers Training Institute and Sharm Fernando, a lawyer and a banker.”
Where are all these respected individuals who lent their name to provide credibility and soundness to induce people to invest in the CIFL? The regulators need to take stock of those being appointed to banks, finance companies and deposit-taking institutions and ensure that such parties, instead of being mere directors, are also held accountable for the dealings of the organization.
The Touchwood saga is one that kicked off in the early 2000s’ when the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) had a problem with its accounts. However in a subsequent court case, the company was cleared of any irregularity in its accounts. The Maloneys, who launched the company offering huge returns on investment in forestry plantations, subsequently sold a major stake to LOLC which ran the company and appointed veteran banker Rienzie Wijetillake as the chairman. He stepped down in July 2012 after LOLC began easing out of the shareholdings, bringing back Maloney, then the largest single shareholder, as the chairman.
Maloney was also approved by the Central Bank as the investor to revive the CIFL, promising foreign cash to end that company’s woes. The rest is history.
www.sundaytimes.lk
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