From a meeting of unpaid investors of Touchwood Investments PLC of Sri Lanka  and Touchwood Forestry Ltd.(TFC) of Bangkok held on March 1st at the Queen Victoria Pub, Sukhumvit Soi 23, Bangkok

A statement by the organiser Tim Randall.

I am going to say as few words to briefly update you on the situation. As you know I started this group at the beginning of the year after I failed to get any sense out of Touchwood ltd. and or Roscoe Maloney (Chairman of TW Investments PLC).
We have a website I have had numerous correspondences from around the world expressing concern and anger at the treatment of investors by Touchwood (TW). I believe it was largely due to our efforts that TW finally set up a department to handle the queries of international investors in Sri Lanka. This was badly needed as from the moment of the closure of the Bangkok international office – with indecent haste – there had been a stunning silence in respect of all enquiries. Although I fear the new departments offers little more than platitudes and empty assurances.

I am going to divide my comments into 3 segments
Forestry, Financials and Fraud.

But I am going to start and end with the last.
Fraud is a word that many of you will feel should be applied to TW. And I suspect that as the full extent of what is wrong comes out it will be used a great deal.
At this point in time I am not so sure. However I will qualify that with my closing remarks.
There clearly was over optimism which has led to miss selling and unobtainable promises and goals.
There has also been some appalling management compounded by the fact that Roscoe Maloney wanted to run a fiefdom instead of a business. Anybody working for him had to do his bidding - without question – or risk dismissal. Thus anybody seeing problems was silenced. He surrounded himself with totally unqualified people.
He had a complexity of companies which added to admin problems as well as costs
Ideas which may have been worth investigating were actioned before they were properly considered and rash promises were made.
On top of that he was greedy for both fame and money. He clearly paid himself and his family more that they were worth whilst failing to pay and employ truly competent people in important roles such as forestry management.
If all that adds up to fraud so be it – but in my view it was arrogance backed up by crass incompetence - once he realized it was all was going wrong - he ran away. So he is a coward as well.
You can make of that what you like but we are here to find solutions – what has gone has gone

On Monday and Tuesday (Feb. 25th /26th Feb. 2013) the three of us :
Paul Rockwood who has many years’ experience in forestry and is part of Asia Teak. Paul was TW UK manager for a while.
Junior Shaw who was with TW in the early days and is now involved in sports marketing.
I am Tim Randall. I am now semi-retired – and have over the years been in various different business in management position and in my youth did a little farming.

The situation at the plantations was not at all well. There were plenty of trees and in part they looked good. There were also large numbers of dead or missing trees and many trees were small and considerable behind the rest. We decided that about 60% of trees have potential – overall the plantations are seriously back on the growth levels we would expect given the 6 or 7 year time frame we have all been promised for payment of harvest returns. In addition they were badly behind when compared to like plantations with different management companies.
We saw little chance of the now promised return in another ‘3 years of growth’ message recently dispatched. The view from Paul and another forestry expert – they visited again on Friday 1st March - was that inoculation for the best trees (payment due now or in 12 months) was 3 years away and for the not so good five years and harvest return will came 18 months later. Generally there needs to be an immediate and significant investment in the planation resources.

Trees were being harvested: but rather than in a single block they were being cherry picked. As TFC do not know who owns what it raised serious questions about who owns the harvested trees? Paul also found one of his clients plots had been moved – because he was told his trees had died – so who’s trees did he get?

There are supposedly 400,000 trees. This begged serious questions about the actual size of the Oud oil market. Based on an eight year cycle 400,000 trees means processing 50,000 trees a year which would mean selling 1,000  kilos of Oud Oil a year. That looks like far more than the market can stand. And how are the trees going to be processed not only will 430 new stills need to be installed (they have 32), they would require a factory of significant size with the relevant management but more tellingly permits and permissions which are not easy to come by.

As to the bamboo – what we saw was pathetic although one of the estate managers did say it was good on another estate (Nong pru) that we did not visit.

Now to the nitty gritty

Firstly virtually all early harvest certificates (pre 2011 I believe) - whether issued by TFC or TW Hong Kong - have the promoters on the back and they include TFC. So TFC is ‘jointly and severally responsible;’ under those contracts. TFC is in Thailand and owns assets in Thailand so it is of interest to us as it is the only company we can easily get at. As to Touchwood Hong Kong we know little. It is clearly not trading in any meaningful way. It is under investigation by both regulatory authorities for miss selling and by HK police for bouncing cheques: the office has been repossessed by the landlord. I think we must assume it is dead.

The state of Touchwood Forestry (TFC).

Arunee Tippilar is the CEO of two years only. She was appointed by Roscoe Maloney to manage the admin side of TFC whist the forestry was the general responsibility of other people – although as CEO she obviously had a watching brief.
I have had two meeting this week with her and her lawyer (Kamthrorn Ounhirunskul of KSS ). I have to say we have reached a mutual understanding on matters. She is as upset as forestry investors. She did not sign up to be ‘toe dropped’ with all of Roscoe’s sh 1 T and that is exactly where she finds herself today.
Having read about the forestry you will no doubt wonder if there are enough trees to go round?
And almost inevitable there are money problems. The maintenance fees which should have gone to TFC have been, and still are, being diverted elsewhere – in particular an unwise investment in Cambodia. In part the issue with the plantations is proper resources were never put in. So the forestry requires serious investment if there is to be a return in the foreseeable future.
The other problem is that TFC have a register of a large number of Thai tree investors but not apparently the even larger number of international ones – it is believed that over 1,000 individuals and entities have bought TW products. TFC have little idea of who owns what.
There is supposed to be a buffer stock of 8% but that has already gone.
My discussions with TFC this week have concentrated on solutions and there are solutions. Collectively we believe the tree investors have invested over $40 million in nearly a 400,000 thousand trees. Assuming 60% of the trees are good and potentially harvestable they are worth – at some point in the future – over $50 million probable nearer $70 million – but they are owned by the investors not TFC. However we assume some trees are owned by TW in Sri Lanka. This is worth noting because TFC has a clear claim against all other TW companies that are named as promoters.
CEO Arunee should be in the driving seat however Tweedle dum and Tweedle dee (Mr and Mrs Roscoe Maloney) remain as directors and are refusing to face reality. Khun Arunee says she wants to see all investors paid and that is what she is aiming for. I wonder what her fellow directors objectives are – do they have any other than not admitting the truth which is that Touchwood is a failure simple because of BAD leadership and poor management. It may not have started as a ponzi scheme but now it looks remarkable like one – with a desperation to sell to new investors so the old ones can be paid off.

Conclusion. The inherent liabilities of TFC must raise serious doubts about its solvency. Not only are there a large number of overdue harvest returns in respect of both agarwood and bamboo in addition in all contracts there is a buy back clause, To the best of our knowledge, there are in excess of a $1 million of overdue harvest return guarantees which nobody shows any sign having the funds to pay. As time goes on more and more guarantees become due. At this stage a sensible option for investors is to invoke the buyback clause (9 on the back of most Harvest Certificates.). That way you have a clear claim when the company fails – a distinct possibility given current precarious state.

Anybody owed money MUST send a final demand to:
Touchwood Forestry Co. Ltd
16th. Floor 29, Bangkok business center,
Soi Ekamai, Sukumvit 63 Road,
Bangkok 10110
Such demand should include a copy of your certificate and a copy of the guarantee (if you have). Please forward copy to me at:
I will build a database of such claims and publicise the number as it grows. At the moment I have details of about $1 million unpaid investments and that will nearly double over the next 12 months.

Whether TFC is effectively bankrupt is a fine point – there are other claims out there which make me think they are. Aequus, an investment company specializing in forestry investment, are suggesting they are soon to commence proceedings against TW and its subsidiaries including TFC  – I believe the amount involved is $3 million.

 I also believe that any Touchwood Company now selling agarwood and or bamboo on its current prospectus is committing fraud. This does not mean that agarwood is not a profitable product – it is and there are people growing and harvesting agarwood successfully. However they have proper forestry resources, understand what they are doing and have the processing and marketing of the end product worked out. At the moment Touchwood have none of those attributes – they have under resourced forestry, no means of processing the quantity of the product they are attempting to grow and no idea of final market. In addition they do not have cash in hand to operate properly. On that basis they should not be selling trees until all these issues are addressed. If they do they are knowingly selling a product they cannot, or have no intention of delivering, and that is fraud.

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