Touchwood escapes winding up with dated cheques in Court

Tuesday, 28 January 2014 00:39 - - {{hitsCtrl.values.hits}}

Under litigation for default, Touchwood Investments PLC (TWOD) yesterday saved its skin from winding up after its Chairman and CEO W.L. Kiwlegedara produced dated cheques in Court yesterday to investors who have filed action. The presentation of cheques was part of revised proposal to the earlier settlement entered into on 31 October 2013 when the case was taken up in Court yesterday.

Kiwlegedara had issued cheques amounting to the value of the 1st instalment that was due on 14 January 2014, from his personal account to the Petitioner K.A.D.L.P. Nanayakkara and seven other intervening creditors. Amidst protest, the Petitioner and other intervening creditors hesitantly accepted the cheques that were presented in Court with the hope of recovering at least some percentage of their dues within the next month. Consequent to the payment of the first instalment that was due on 14 January 2014 upon the realisation of the cheques issued, the initial terms of settlement will take effect, where the company will be bound to pay the second and third instalments by 14 March and 14 June this year, respectively.

" Chairman and CEO W.L. Kiwlegedara produces dated cheques from his personal account to pay eight investors
Revised payment proposal submitted; promises to pay second and third instalments by 14 March and 14 June this year
Parties to agree on a specific default clause to be included in the terms of settlement; failure by company the default clause will take immediate effect
Case to be called on next on 25 February for company to file a complete list of investors/creditors who will paid and this list will include all the investors of the Agarwood Plantation in Thailand"

The case will be called on 25 February 2014 for the company to file a complete list of investors/creditors who will paid by the company and this list will include all the investors of the Agarwood Plantation in Thailand whose Harvest Agreement Certificates have been issued by Touchwood Investments PLC, regardless of whether they have intervened in the present case or not. The parties will also agree on a specific default clause to be included in the terms of settlement on the said date. In the event the company fails to honour the cheques issued to the Petitioner and other intervening creditors the default clause will take immediate effect. These developments arose when the Case No. 31/2013/CO filed by Nanayakkara to wind-up Touchwood Investments PLC was taken up in the Commercial High Court yesterday where the Petitioner, the company sought to be wound-up. The Securities Exchange Commission and many other investors of the company were present and legally represented in Court. Subsequent to the settlement entered into by the parties on 31 October 2013 where the company sought to be wound-up undertook to pay all the investors of the Agarwood Plantation in Thailand to whom the Harvest Agreement Certificates were issued by the company, the company failed to adhere to the terms of settlement. In accordance with the settlement recorded in Court on 31 October 2013 the company assured that the petitioner would be paid all his dues, in two instalments in three months and five months respectively from 14 October 2013 and that other investors/creditors of the company would be paid in full, in three instalments amounting to 25%, 25% and 50% of the total dues in three months, five months and eight months respectively, running from 14 October 2013. The company further undertook to file a complete list of investors by 9 January 2014 to whom monies will be paid by the company in settlement of all its debts. The company however, failed to file the complete list of investors/creditors of the Company by 9 January 2014 and also failed to pay the first instalment due on 14 January 2014 and further neglected to inform the investors of its inability to act in accordance with the terms of settlement, acting in contravention of the settlement entered into in Court. Senior Counsel of F.J. & G De Saram Avindra Rodrigo appeared for the Petitioner while President’s Counsel Harsha Amarasekara appeared for Touchwood Investments PLC.