TWO MAJOR accountancy firms and a hedge fund service have been directed by the High Court to provide any information they have concerning two Virgin Islands-registered investment companies that collapsed with alleged losses of $200 million (€152 million).
Joint liquidators were appointed in September 2009 to Mount Capital Fund Ltd and Mount Capital Asset Subsidiary Ltd by the courts of the British Virgin Islands.
Last January, the islands’ commercial court division ordered liquidators Hadley Chilton and John Greenwood to apply to the High Court here for recognition of the liquidation of the Mount Capital companies.
In their ex parteapplication, the liquidators are seeking various orders to assist them in recovering the companies' books, assets and properties and to allow them to examine relevant persons in relation to their inquiries.
They are seeking documents from PricewaterhouseCoopers (PwC), Deloitte Touche Ireland and Citi Hedge Fund Services Ireland Ltd.
In an affidavit, Mr Chilton said the scale of financial loss the BVI companies had encountered “is in excess of $200 million”. He said the companies selected PwC as their auditors for 2002 to 2005, while PwC was also involved in the preparation of the companies’ statements in 2003. Deloitte was the auditor for 2006 and 2007 and prepared financial statements in 2007 and 2008, he said.
Citi Hedge Fund Services Ireland Ltd’s predecessors had entered into administration agreements with one of the companies, the Mount Capital Fund, Mr Chilton added.
He said the liquidators needed the books and records of the accountancy firms and access to two Citi employees who, he said, had detailed knowledge of the administration of the companies.
Granting the liquidators’ application, Ms Justice Mary Laffoy said the High Court recognised orders made in September 2009 and last January by the courts of the British Virgin Islands in relation to the Mount Capital companies.
She also gave liberty to any of the parties affected by the order to challenge the court’s jurisdiction.
In her judgment, Ms Justice Laffoy said, because neither PwC nor Deloitte had had an opportunity to reply to Mr Chilton’s affidavit, she considered it appropriate to exercise caution in recording the facts set down by Mr Chilton.
However, for present purposes, she noted PwC had said in a letter to the liquidators last December it was willing to furnish certain categories of information subject to some issues being clarified. The liquidators did not consider that response to be sufficient, she said.
Deloitte had written to the liquidators saying it did not hold any books or records and any documents in its possession were “working papers” which the company would not disclose unless ordered to by an Irish court.
This response was also regarded by the liquidators as inadequate, Ms Justice Laffoy said.
Citi had not provided the liquidators with what they viewed as a substantive response to a request for a meeting with two of its employees who had detailed knowledge of the Mount Capital companies, she added.
