On Touchwood stories last week
Ajith S. Ratnayake, former Director General and Founder of the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB), has sent in the following letter in response to last week’s reports on the Touchwood saga:
“I refer to the articles and the timeline relating to Touchwood Investments Plc last week. One of the articles stated as follows: ‘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 above statement and the timeline (given) does not present the correct position in view of the following:
- The judgment of the Court of Appeal did not clear the company of any irregularity in the accounts, though it quashed the decision of SLAASMB.
- The decision of the SLAASMB was quashed, inter alia, on technical grounds, namely that IAS 41 was not adopted in Sri Lanka at that time and therefore SLAASMB did not have statutory authority to monitor compliance with IAS 41.
- The SLAASMB requested special leave to appeal to the Supreme Court, inter alia, on the basis that (1) the statute required the company to comply with Sri Lanka Accounting Standards (SLASs): (2) SLASs covered the matter under consideration; (3) in any case, SLASs specifies how an event or condition is required to be addressed in the absence of a specific SLAS that applies to it; and (4) accordingly SLAASMB had statutory authority to determine whether the company complied with the relevant requirements in relation to biological assets.
- The Supreme Court, having heard both parties and been satisfied that there were sufficient grounds to appeal, granted SLAASMB special leave to appeal.
Mr. Ratnayake also said that SLAASMB had filed the appeal in the Supreme Court. At SLAASMB’s request, the case was listed as ‘top of the list’. However, it got postponed every time the case was listed for hearing, the last time being on Monday, June 9. “I understand that the postponement on that day was due to a decision to hear the case re-Golden Key on that day. So, the final decision by the Supreme Court is still pending. SLAASMB was unable to monitor compliance by Touchwood Investment PLC re-valuation of biological assets in the subsequent years, as the legal position regarding its ability to monitor was pending,” he said.