An inspector has been appointed by the High Court to investigate the operations of the Christmas tree planting company.
In a ruling on Tuesday, Judge Michael Quinn found that there was “prima facie evidence of fraud, illegality, or other misconduct” on behalf of WFS Forestry, which violently denied plaintiffs’ allegations. I didn’t hesitate. “
Therefore, he met the criteria under Article 747 of the Companies Act of 1990 and was convinced that the appointment of accounting firm PKF O’Connor, Leddy & Holmes inspector Declande Lacy would serve the purpose of revealing unknown facts.
The judge said this was the first recorded application by a creditor seeking the appointment of an inspector under the law.
He issued an order, among other things, to instruct inspectors to investigate whether the company’s business was done with the intent of fraudulent creditors, or for fraudulent or illegal purposes.
The company, which has an office at the Fitzwilliam Business Center on Pembroke Street 26/27 in Dublin 2, is said to be seeking investment to grow and supply Christmas trees and fund its business. increase.
The application for Section 747 was brought by investor John Carney, with 17 other people claiming that their investment in WFS Forestry, which was variously structured as loans and other down payments, was not repaid by the due date. Supported by investors.
His lawyer, Frank Beatty SC, directed by Peter Boyle Solicitors, has filed a “very realistic” public interest in the case due to allegations of fraud.
Allegations against the company have been completely denied.
Craig Hands, the only director of the company on behalf of himself and the company in court, opposed the appointment of an inspector as inappropriate and unnecessary. He denied fraud and blamed Covid-19 for cash flow issues and delays in return on investment due to transaction delays.
The judge said there was evidence in this case of investor involvement and transactions justifying the investigation by an inspector appointed under Section 747.
Among the questions that need to be reviewed are whether the company has a valid profit on the land mentioned in the crop purchase contract and whether the crops of the trees mentioned in the company’s pamphlets and websites will lead to an investment. Please, whether it exists in a given location or elsewhere. Said.
Judge Quinn said both the Office of Corporate Execution (ODCE) and the minister, who had been notified of the proceedings, had submitted that the company had gone bankrupt and that a better remedy for the matter was a liquidation order. rice field. Company up.
Neither objected to the appointment, but the liquidator has the power to investigate how the investor’s money was treated, first appointing an inspector and imposing this additional cost on the taxpayer. They said they were disproportionate.
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Judge Quinn said the evidence required under Article 747’s application was more substantive than the evidence in the liquidation petition. Therefore, he states that there is no reason to believe that these types of applications are more cost-effective to become a more popular route for commonly affected creditors, at least in the first example. rice field.
But if he was wrong about this, he added that court scrutiny of such an application would be effective.
Even if the application was initially motivated by Mr. Kearney’s desire to secure a refund of money, the case cannot be said to have no broad public interest or public side, the judge said.
He said at least 18 investors were said to be affected, and the evidence shows that they had invested more than € 1.4 million.