The High Court has ordered the winding-up of the treasury operation of the USIT group. The winding-up order made by Ms Justice Carroll was sought by National Irish Bank, which described itself as an unwilling creditor to the company for €3.38 million (£2.66 million).
The provisional liquidator, Mr Ray Jackson of accountancy firm KPMG who was appointed on January 29th, said the company was "totally insolvent" and unable to pay its debts.
USIT Ltd is registered in Northern Ireland but has its place of business in the Republic. It provided treasury services to the other companies in the USIT group which are seeking the appointment of an examiner.
Mr Jackson also took the view that the company did not keep proper books and records. It appeared the books and records had not been written up since at least October 31st, 2001. He added he had not received the full co-operation of the directors of the company - Mr Gordon Colleary and Mr Angel Olivares - during the provisional liquidation.
The court was told by Mr Lyndon MacCann, for NIB, that it appeared both Mr Colleary and Mr Olivares had resigned as directors on January 23rd last and had been replaced by representatives of the STA which the company had acquired, for one euro, 82 per cent of the issued share capital in USIT World plc (of which USIT Limited is a wholly owned subsidiary) on January 23rd.
In addition to making the winding-up order for USIT Limited, Ms Justice Carroll also appointed Mr Jackson as official liquidator. She directed the company's statement of affairs be prepared by Mr Colleary and Mr Olivares as, she stated, they had most knowledge about the situation within the company.
In his report, Mr Jackson said it appeared the failure of the company was due to several factors. The events of September 11th had a major effect on cash flow. Further pressures were put on the company finances by its funding of the 60 per cent purchase of a US company, Council Travel. USIT Limited had also drawn cheques on related company bank accounts for which there were no funds available.
