SEC assigns Special Purpose Audit for Blue Diamonds

Sri Lanka’s Security Exchange Commission

Feb 12, 2016 (LBO) – Sri Lanka’s securities regulator has assigned Ernst & Young to carry out a Special Purpose Audit to check several allegations made against Blue Diamonds Jewellery Worldwide.

Releasing a statement Securities and Exchange Commission said they received several complaints alleging that the Director Board has misled their shareholders and investors through its 2015 September quarter interim financial statements.

Complaints have also received saying the proceeds raised at a recently concluded Rights Issue has misused for the benefit of Related Parties, the statement further said.

The scope of the Special Purpose Audit:

• to verify utilization of proceeds collected from the Company’s Rights Issue;
• identification and quantification of Related Party Transactions; and
• the extent of compliance of interim financial statements with Sri Lanka Accounting Standards No. 34 — Interim Financial Reporting (LKAS 34).

Therefore Blue Diamonds Jewellery Worldwide has been directed as follows:

1. to engage Messrs. Ernst & Young, Chartered Accountants to carry out a Special Purpose Audit for the reasons stated herein in accordance with the scope mentioned above;

2. to submit to Messrs. Ernst & Young the Auditors all such information and access to such information stored inter alia in the books, documents, and electronic devices of the Company as the Auditor may require in respect of the discharge by the Auditor of all or any of the duties entrusted to it by the SEC in relation to the scope mentioned above;

3. to ensure that all Directors and Officers of Blue Diamonds Jewellery Worldwide PLC furnish to the Auditor all information within his knowledge or which he is capable of obtaining or any information which the Auditor requires to enable it to carry out its duties;

4. to ensure that the information which is furnished to the Auditor is not false or misleading in any material particular;

5. to ensure that no information pertaining to Blue Diamonds Jewellery Worldwide PLC stored in the books or documents or electronic devices of the Company are altered, destroyed or removed in any manner; and

6. to fully co-operate with the Auditor to carry out the Special Purpose Audit entrusted to the Auditor by the SEC.

Blue Diamonds will be required to pay for the audit and the date of the commencement of the audit is to be notified later.