Setting the Precedent: Triumph in Fraudulent Trading
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2025年3月19日
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Days Impex Limited and Days International Limited (together, the “Companies”) were wound up in Hong Kong in December 2011 amidst criminal convictions of the Companies’ officers and allegations of conspiracy to defraud its creditors. FTI Consulting navigated a lengthy litigation process to successfully uncover misfeasance and conspiracy to defraud creditors, ultimately securing a favourable judgment to recover more than USD39 million.
Our Impact
- Despite numerous interlocutory applications taken out by the director to side track the main civil actions, FTI Consulting successfully contested before the main proceedings, where we provided key expert evidence resulting in the judgment.
- The court’s decision was handed down in November 2024, both affirming FTI Consulting’s claims and providing significant clarification to the legal framework for fraudulent trading in Hong Kong.
- The judgment resulted in a significant financial order against the Companies’ former officers, securing payment of more than USD39 million to FTI Consulting, as liquidators, for the benefit of all stakeholders involved and setting a profound legal precedent.
- Through meticulous legal strategy, FTI Consulting secured a landmark judgment — the first of its kind issued in Hong Kong for a trial on fraudulent trading under Section 275 of the Companies (Winding-up and Miscellaneous Provisions) Ordinance, Cap. 32.
Our Role
- FTI Consulting was appointed Joint and Several Provisional Liquidators by a syndicate of bank lenders in September 2011, and Joint and Several Liquidators of the Companies by order of the High Court in August 2012.
- FTI Consulting immediately took action to raid the Companies’ office where important evidence was secured to support the criminal case against the Companies’ officers and our civil case against a de facto director.
- Our investigations revealed assets sitting in Canada, where upon their application, a Court Order was successfully obtained to injunct any dissipation of assets by the de facto director. Further legal action was also taken against the Companies’ auditors for audit negligence and a former office for asset dissipation, resulting in favourable settlements for the Liquidators.
- Our team presented a robust case throughout the nine-day trial, advancing evidence uncovered by forensic accounting and comprehensive fund flow analysis to demonstrate the fraudulent nature of transactions.
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