Sri Lanka forestry firm share price hit by court action

Mar 09, 2010 (LBO) – Sri Lankan stocks closed 0.68 percent lower Tuesday with forestry firm Touchwood Investments falling sharply after an accounting watchdog said its tree valuation method is being challenged in the Supreme Court, brokers said. The All Share Price Index closed at 3,809.01, down 26.05 points, while the Milanka index of more liquid shares slid 0.26 percent (11.57 points) to close at 4,382.32.

Turnover was 627.6 million rupees, according to stock exchange provisional figures.

“Retailers dominated the day’s play,” Nikita Tissera, research manager at stock brokering firm SC Securities said.

“Touchwood Investments was traded the most and had a significant drop in share price due to a stock exchange filling which said the debate on its asset valuation could prolonged.”

Touchwood is engaged in management of plantation and private forestry and in the sale of plantations as an investment to local and foreign investors.

Touchwood Investments was the day’s biggest loser, closing at 111.50 rupees, down 9.35 percent or 11.50 rupees, after sinking as low as 101 during trading.

The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) said in a stock exchange filing that it was pursuing the action challenging the firm’s method of valuing its timber in the Supreme Court.

SLAASMB in 2007 had ruled that the fair value method adopted by the firm in valuing its timber was unreliable.