On or around January 16, 2023, fraud-hit Stocks and Securities Limited (SSL) applied to the Companies Office of Jamaica for a members’ voluntary winding up.
SSL’s regulator, the Financial Services Commission (FSC) yesterday, obtained a court order preventing SSL from doing so.
What is a members’ voluntary winding up?
As the name suggests, this mode of winding up may be done without the influence of creditors or the court.
To undertake a voluntary winding up, the company must be solvent and make a statutory declaration indicating that it is able to pay its debts in full, no longer than 12 months after commencing the winding up.
A company wind-up results in the assets being identified and realised, the debts of the company paid out of proceeds of realisation based on priority, and any remaining balance returned to the shareholders.
At the end of the winding-up process, the company is essentially a shell; to complete the liquidation process, it must be dissolved.
Once the company is dissolved, it ceases to exist, and no claim can be brought against it.
The move to wind up the company came days after SSL disclosed to the FSC that it became aware of the fraudulent activity by a former employee. This resulted in the regulator assuming temporary management of the private firm.
Now, with a court order preventing SSL from winding up and liquidating its assets, the company is prohibited from:
disposing of, dealing with assets and liabilities in SSL’s name or its clients’ names, withdrawing, transferring or otherwise dissipating any funds from accounts in its name wherever held;interfering with the acts of servants or agents of the FSC and Temporary Manager and to comply or otherwise cooperate with the directions of FSC and the Temporary Manager and any servant or agent of the Temporary Manager;winding up or dissolving the company and liquidating the assets of SSLreorganising the company or its operations whether it be in any document form or organisation of its members, or the assets and liabilities
The interim injunction obtained by FSC remains in place until February 17, the date set for a court hearing.
