Jones J
1 IN THE GRAND COURT 2 FINANCIAL SERVICES D 3 4 Before The Hon Mr Jus 5 In Chambers on 14th, 1 6 7 IN THE MATTER OF TH 8 AND 9 IN THE MATTER OF VC 10 OF THE CAYMAN ISLANDS DIVISION Cause No. tice Andrew J. Jones QC 5th and 17th July 2014 COMPANIES LAW (2013 REVISION) COMPUTER HOLDINGS LIMITED 13 of 2014 (All) 11 Appearances: For the 12 13 For the 14 Pearman 15 16 17 18 1. This is an appl- Holdings Limited 19 petition presen- 20 21 under the con- 22 parent company, 23 able to appoint 24 affidavit sworn Petitioner - Mr. Neil Timms QC instructed by Ms Charlotte H. Company - Mr. Nigel Meeson, QC and Mr. Michael Mulligan. REASONS cation for the appointment of provisional liquidators if,ies- made pursuant to section 104(1) of the Companies Limited (“Zukipa”), a Cypriot firm Olgar Finkei (“Dr. Finkei”). Dr Finkei is the official in- Sakaras Holding Limited (in liquidation) (“Sakaras”), in wit, herself as the sole director of Zukipa. The application by Dr Finkei on 20 June 2014. offman of Turners of Conyers Dill and 7 CJ 8 Defendant 9 of VC Computer at Company which is not company which is such capacity she was supported by an 25 26 2. The Petitioner 27 reached the pre- 28 behalfofthe 29 winding up ord- 30 pending the he- 31 pendinqthe he- 32 circumstance v 33 least 4 clear d 34 parties hearing 35 parties until 14 Reasons -ESD 63/2014 - VC co This application first came before the Court on 23 June 2014 (disposition), without the benefit of any submission company, that Dr Finkei’s evidence established a prima facie on grounds of insolvency and also a case for appointing guarantor of the petition. However, I was not satisfied that there which would justify dispensing with VC’s right under CVRO lys’ notice of the application. I therefore adjourned the ap- which was initially fixed for 30 June and then adjourned July. mputer Holdings Jones J When the Petitioner C. On that occasion I has or evidence on a case for making a provisional liquidators was any exceptional der 4, rule 1(2) to at plication for an inter al by consent of the Page 1 of 4
1 2 3. At the hearing, 3 the affidavit sw 4 ought not to be 5 does not stat 6 authorized to 7 affidavit. For r 8 that there was 9 which to estab 10 evidence about 11 adjourned for 12 filed. One is sv on 14 July counsel for the Petitioner (now Mr Neil Timms QCorn by Dr Mikhail Krasnov ("Dr Krasnov") and intended to be admitted in evidence because it did not comply with the fact on behalf of the company or the sources of the information which will become apparent from analysis of the ement in this submission. I ruled that, in the absence of fraud by Dr Krasnov's role, his authority and the basis upon which VC affairs, his affidavit would not be admitted in evidence two days to enable additional evidence to be filed. Two from by Ms Natalia Terekhova, the former managing director of Verysell SA, who 13 took the point that be relied upon by VC mal requirements. It is upon which he is nation stated in this violence, I concluded further evidence from the application was other affidavits were or of Verysell SA who 14 15 knowledged on 16 not pursue the 17 evidence and on 18 prima facie can 19 necessary in o 20 misconduct on 21 22 4. It Is not dispute 23 Limited to final 24 computer equi 25 VC reflect that 26 between 27 Mar 27 Zuklapa which 28 relating to the 29 $30m to Sakaras 30 and to manage VC's affairs pursuant to a general power of Ben Hobden, an employee of the company's attorneys. I matters stated in the affidavit. In the light of this further point about its admissibility. Having considered the voluntary exhibits, I am still of the opinion that the Petitioner for a winding up order and that the appointment of provider to prevent the dissipation of assets and the continued the part of those who control VC. red Sakaras used the proceeds of $30m worth of loan notice the business activities of VC which was engaged in the ment into the Russian market. The books and records of these companies entered into a series of seven back to bare on 7 and 8 December 2010, by which Sakaras lent an amount to VC. An examination of the first of these transactions reflects that on 27 March 2007 as which in turn paid $10m directly to VC. Although there is no further evidence, counsel did have no personal evidence, counsel did role of the affidavit pledge of the affidavit other has made out a visional liquidators is mismanagement and notes issued to Brava purchase and sale of Sakaras, Zuklapa and back loan agreements to the $32.4m to Brava limited paid funds did not pass 30 under Zuklapa 31 agreements da 32 be performed 33 agreements in 34 management. 35 loan agreement 36 exercised ultim 37 find wholly unc 38 39 5. His assertion to 40 with other doc 41 Zuklapa's bank Reasons—fso 63/2014—VC co
1 of $240,000 fr 2 of loan agreed 3 dated 17 April 4 narrative desc 5 Dr Krasnov's a 6 evidenced that he was also refe 7 nine months o 8 existed, these 9 were not 10 from VC and the narrative description of the transaction is “payment No.3A” (which is the loan agreement dated 27 March 2010) reflects a corresponding payment by Zukiapa to Sakaras in “Payment of interest for Loan No.3”. This is evidenced that the loan agreements were never in fact perf ined on VC’s management accounts for the years ended 31 December 2012. Contrary to Dr Krasnov’s assertion, the accounts do reflect that VC was indebted to “Zukiapa (Sakaras)” 11 of $2,05,000. The ce which contradicts 12 formed. Dr Krasnov’s Zukiapa’s directors 13,4m and interest of December 2011. 14 C 2009-2011 and the at no loan liabilities 15 now that none 16 own audited fr 17 other receivable 18 reconcile that from VC’s main 19 financial state 20 have been writ 21 response to a 22 “interest” of $3 23 24 7. This evidence is 25 the management 26 response to the 27 management or 28 and the date up 29 evasive. It is sig- 30 nificant that VC’s 31 of its key notes, rather than “nominal loan receivables”, but no actual financial statements. As at 31 December 2010 these liabilities accounts and the corresponding assets have disappeared. No explanation has been offered for the fact that VC cen off. However, VC’s management accounts for the years are inconsistent with the audit confirmation dated 4 May 2011. 32 of Zukiapa from VC as at 31 December raises serious concerns about the integrity and competence of VC, Zukiapa, Sakaras and, by implication, the wider V C’s strategy demand served by the Petitioner leads to the question de relied upon to conduct the company’s affairs from which this petition is likely to be tried. At best, the response by Mr Caldas, who appears to be a nominee having no liabilities as “Trade and it has been made to 33 at his disposal” (2009), Zukiapa’s creditors appear to 34 have disappeared sliabilities appear to ended 31 December lay 2012 written in $36,425,369.83 and
of those involved in versell Group. Their consent that VC’s personal knowledge 31 VC and Zukiapa 32 of the accounts 33 discovered that 34 He says that VC 35 to explain the le 36 37 8. The manner in 38 Sakaras and the 39 Sakaras’s liquid- 40 maintain the in- judgment it is 41 Reasons –fsp 63/2014 –VC Con-
1 mismanagement 2 maintain the in- 3 official liquidat- 4 made. On the c 5 mind that it cer- 6 than a nominal 7 t and misconduct of the kind which has occurred in the regi-ty of VC's books and records will prejudice the Petitioners in the performance of their duties in the event that, at their hand, it is difficult to see how the appointment can be used to carry on business at least a year ago and is said to have no assets other 8 J give directions for 9 the trial of the 10 11 DATED this day of A t and misconduct of the kind which has occurred in the regi-ty of VC's books and records will prejudice the Petitioners in the performance of their duties in the event that, at their hand, it is difficult to see how the appointment can be used to carry on business at least a year ago and is said to have no assets other 12 JUDGE OF THE GRAND 13 14 15 16 The Hon. Mr. Justice A 17 JUDGE OF THE GRAND New J. Jones, QC COURT Reasons - FSD 63/2014 – VC Co puter Holdings Jones I Page 4 of 4