June 14, 2006 (LBO) – Sri Lanka’s securities watchdog is probing the accounts of forestry management company Touchwood Investments Ltd, to figure out how the firm values its assets, a top official said Wednesday. Touchwood’s shares resumed trading mid-Wednesday after the firm responded with a three page letter to regulators, who asked for the assumptions used to arrive at fair values for its plantation assets.
The company had adopted the International Accounting Standard (IAS) 41 to value its Mahogany and Vanilla plants and bring plant growth into its books.
“SEC has directed the urgent issues task force of the Institute of Chartered Accountants of Sri Lanka to make a determination in regards to the conformity of the accounts to the applicable standard,” Securities & Exchange Commission Director General Channa de Silva told LBO.
Touchwood shares were suspended on Monday, by the Colombo Stock Exchange, pending more disclosure about its use of IAS 41.
The firm reported a 103 percent rise in net profits for the financial year ended March 31, has seen a sudden jump in share prices, with the stock chased mainly by local retail investors.
The SEC is expected to launch a separate investigation into