When a company is being wound up, its liquidators have powers to investigate into the company’s affairs and dealings. Such powers are for the purpose of discharging their duties as officers of the court to steward the estate in liquidation.
However, to what extent are liquidators supposed to investigate the company’s affairs, particularly in the event of disputes between shareholders? Is it within the liquidators’ purview to determine, for instance, the true ownership of the shares of members in order to distribute the assets of a company to the members?
These and other issues arose in Rashmi Bothra v SuntecCity Thirty Pte Ltd [2023] SGCA 38, in which the Court of Appeal (“CA“) considered whether the High Court Judge (“Judge“) had correctly rejected a shareholder’s nominees as liquidators due to a perception of conflict and bias that would arise if the liquidators were required to determine the true beneficial ownership of her shares. The CA considered the purpose of the liquidators’ investigative duties, finding that (i) the issue of beneficial ownership should be determined in separate proceedings between the relevant parties and not by the liquidators, and (ii) concerns of perceived conflict and bias surrounding the shareholder’s nominee liquidators were unfounded.
The appellant was successfully represented by Vikram Nair, Foo Xian Fong, and Glenna Liew of Rajah & Tann Singapore.
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