Carey Olsen's Dispute Resolution Group has successfully
secured orders on two separate applications under Guernsey's
Protection of Investors and Company Law legislation to place two
regulated entities into administration and one company into
Managing Partner, Advocate John Greenfield, and Senior
Associate, Tim Bamford, acted for the Guernsey Financial Services
Commission (the "Commission") on both applications.
The three companies which were the subject of the applications
are part of the Providence investment group. The Commission held
concerns about the operation and financial position of the
Providence group, including in relation to investor funds placed
into a locally based investment fund in the group. The Commission
instructed Carey Olsen to present the two applications to secure
urgent protection for investors and the wider public under the
relevant statutory regimes.
The first application was brought under the Protection of
Investors (Administration and Intervention) (Bailiwick of Guernsey)
Ordinance, 2008 (the "2008 Ordinance")
which empowers the Commission to apply to the Royal Court to place
regulated entities into administration where it considers there is
an undue risk to investors.
The Royal Court granted the order sought and placed Providence
Investment Funds PCC Limited and Providence Investment Management
International Limited into administration, appointing Andrew Isham,
Alexander Adam and Philip Bowers of Deloitte LLP as joint
The second application was brought under the Companies
(Guernsey) Law, 2008, as amended (the "Companies
Law"), to place the parent company of the Providence
group into compulsory winding-up to protect the public and the
reputation of the Bailiwick of Guernsey.
The application was considered necessary by the Commission
following evidence uncovered about the operational and
financial position of the group which necessitated the urgent
appointment of liquidators to its parent company. It was necessary
to give the Commission the legal status to those funds that may
have passed through the company on behalf of investors. The Royal
Court granted the order, and appointed Messrs Isham, Adam and
Bowers as joint liquidators.
The first application is one of only a handful of similar
applications which have ever been brought under the 2008 Ordinance.
As such, it is a notable case in demonstrating the powers available
to the Commission and the Royal Court to act to protect investors
in critical situations.
The second application is of a type which is also brought
extremely rarely, and there are believed to be no reported
decisions of the same type under the current Companies Law. It is
therefore a significant case of note to highlight the power of
Guernsey's regulator and the Royal Court to intervene in
appropriate situations to protect investors and the wider public,
as well as the reputation of the island. This case also serves to
illustrate the extensive statutory powers of the Commission to
wind-up a non-regulated company in circumstances where the normal
applicants for such an order (directors, shareholders, creditors)
have no interest in pursuing such an application – indeed
many certainly oppose it.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
A guide which outlines the procedures to wind up Jersey registered companies, the circumstances in which transactions entered into by an insolvent company may be set aside, and the circumstances in which a company’s officers and managers may incur civil or criminal liability.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).