A massive legal case brought by a company listed on the Alternative Investment Market (AIM) against certain of its former directors and involving the recovery of potential damages in excess of ?300 million is now likely to be heard in the Isle of Man.
A legal challenge to the Isle of Man’s jurisdiction over claims by property investment fund Hirco plc for fraud and other misconduct against Niranjan Hiranandani and his daughter Priya Hiranandai-Vandrevala has been dismissed by the Isle of Man’s Court of Appeal, the High Court’s Staff of Government Division.
Hirco plc and Hirco Holdings Ltd are represented by Isle of Man-based Cains Advocates in a team led by Lindsey Bermingham whose areas of expertise include fraud, anti-money laundering and white collar crime.
The company invested (via Hirco Holdings Ltd) more than ?350 million in township development projects in India sponsored by its former chairman Mr Hiranandani and its former chief executive officer Ms Hiranandani-Vandrevala.
The Isle of Man proceedings allege fraud and other misconduct by Mr Hiranandani and his daughter on the basis that the investments were based on misinformation. Mr Hiranandani had appealed a lower court ruling that he and his daughter would have to answer the allegations in the Isle of Man.
In its judgement dismissing the appeal the Staff of Government commented that the “courts of the Isle of Man have a legitimate interest in ensuring that claims in fraud and claims in respect of breaches of directors’ duties...are dealt with expeditiously”. The decision means that father and daughter will stand trial in open court in the Isle of Man, subject to Mr Hiranandani seeking and obtaining leave to appeal to the Privy Council.
In a statement Hirco plc’s board said: “The board is again gratified by the Isle of Man’s efforts to police allegations of fraud and other misconduct in connection with Isle of Man companies. Hirco plc is now looking forward to publicly trying its claims for fraud and other misconduct against the defendants Nirananjan Hiranandani and Priya Vandrevala-Hiranandani and recovering damages in excess of ?300 million.”
The statement adds: “The claimants raise serious claims against Mr Hiranandani in his capacity as a director of plc. Mr Hiranandani’s position as a director is at the heart of the claimants’ case aainst him.”
Shares in Hirco were suspended in August last year and after its extensive efforts to clarify the status of the investment projects were ignored. The company’s inability to clarify its financial position meant its shares were delisted from AIM on 21 February 2014.
