Title | Lifting-the-Veil - lectures |
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Course | Company law |
Institution | University of London |
Pages | 10 |
File Size | 189.8 KB |
File Type | |
Total Downloads | 63 |
Total Views | 168 |
Company Law LIFTING THE VEIL OF INCORPORATION Examples It may involve holding individuals inside the company liable – either to the company itself, or to a third party who has been injured. It may involve simply refusing to treat a company as a separate legal personality, and working out what ri...
Company Law LIFTING THE VEIL OF INCORPORATION
Examples I tma yi nv ol v eh ol di n gi nd i v i d ua l si ns i det h ec omp a n yl i a b l e–e i t h e rt ot h ec omp a n yi t s e l f ,ort oat hi r dpa r t ywho h a sbe e ni n j u r e d . I tma yi nv ol v es i mpl yr e f us i ngt ot r e a tac ompa n ya sas e pa r a t el e g a lpe r s ona l i t y ,a ndwor ki n gout wha tr i gh t sa nd l i a bi l i t i e sp e opl eha v ea si ft hec o mpa n ydi dno te xi s t a t a l l . S ub s i di ar yc omp ani e si nwh i c hi ti sus ual l yt h es ol eS har e h ol de r :t r e a t i nge a c hc o mp an yi nagr o upa ss e pa r at ewas mi s l e a di ng ;Pr ov i s i on swe r ei nt r o duc e dt or e c o g ni z et h i sf ac t . s . 3 99CA20 06p r o vi d e st ha tpa r e nt c o mpa ni e sh a vead ut yt opr od uc eg r o upa c c o unt s s . 4 09CA20 06a l s or e qu i r e st hep a r e nt t op r o v i ded e t a i l soft hes h a r e si th ol dsi nt h es ub s i di a r i e sa ndt he s u b s i di a r i e s ’na me sa ndc oun t r yofa c t i v i t y . Pos s i b i l i t yo fu s i n gt h ec or p or at ef o r mt oc ommi tf r au dt h atpr ompt e dt h ei nt r o du c t i ono fan umbe rofc i v i lan d c r i mi n alp r ov i s i on s ;Ne g at et h ee ffe c t ofc o r por a t epe r s o nal i t yan dl i mi t e dl i a bi l i t y s . 9 93CA20 06 ,whi c hp r o v i d e sano tmuc hu s e dc r i mi na lo ffe n c eoff r a ud ul e ntt r a di ng . s s . 21 3–2 15I ns o l v e nc yAc t19 86, whi c hc o nt a i nt h emo s ti mpo r t a n ts t a t u t o r ypr ov i s i o ns . I ns ol v e nc yAc t , s . 2 13 An y o nei n v o l v e di nt h ec a r r yi n gou to ft hebus i ne s sc a nb ec a l l e dup ont oc on t r i bu t et ot hed e b t soft hec o mpa n y . Thi s i smo s tl i ke l yt obes h a r e ho l d e r sordi r e c t or sbutc a na l s obee mpl o ye e sa ndc r e di t or s . =I fi nt e ntt od e f r a udc r e di t or sdu r i n gwi nd i ngu p=>pe r s ona l Li a b i l i t y ReToddLt d[ 19 90] Adi r e c t orwa sf ou ndl i abl et oc o nt r i but eo v e r£7 0, 00 0t ot h ede bt soft h ec ompa nyb e c a us eo fhi sac t i v i t i e s . b e c amea d i r e c t o ri nMa y19 82 .I n19 86hewasc on v i c t e doff r au dul e nte v a s i o nofVATi nr e l at i ont oVATdu ef r o mt he c o mp an y . He l d-d e c l a r i n gt h atM wasl i abl e =Th ewho l eoft h ee vi d e n c es h o we dwi t hh i g hde gr e eo fc e r t a i n t ybus i n e s swi t hi nt e ntt od e f r a u dc r e di t or s . The r ei sa l s ot h epo s s i bi l i t yt ha tc r i mi na ll i a bi l i t yc ou l df ol l ow,wi t hat e r m ofi mpr i s on me nta st heu l t i ma t ep e n a l t y ( s . 99 3CA200 6) . Cr i mi na lpe na l t ywa si n t e n de dt oa c ta sas t r on gde t e r r e n tt of r a ud ul e ntbe ha v i o ur ,i tp r ov e dt oh a v et heunf o r t una t e e ffe c to fne ut r a l i s i n gt hee ffe c t i ve n e s s o f st h ec ou r t ss e tav e r yh i g hs t a nd a r do fpr o off or' i n t e n tt ode f r a ud ' s . 2 1 3a b e c a us eoft hepos s i b i l i t yo fac r i mi na lc ha r gea l s oa r i s i ng . 9 93Offe nc eo ff r audul e ntt r adi ng ( 1 )I fa nyb us i n e s so fac ompa nyi sc ar r i e donwi t hi nt e ntt ode f r audc r e di t or soft hec o mp an yorc r e di t or sofan y o t h e rpe r s on, orf o ra nyf r au dul e ntpur p os e ,e v e r ype r s onwh oi sk no wi ng l yapa r t yt ot hec a r r y i ngo noft h eb us i ne s s i nt h atma nne rc ommi t sanoffe nc e . ( 2 )Th i sap pl i e swh e t he ro rn ott hec o mp anyha sb e e n, ori si nt hec o ur s eofb e i n g ,wou ndup . ( 3 )Ape r s o ng ui l t yo fa noffe nc eund e rt h i ss e c t i o ni sl i ab l e — ( a )onc o nv i c t i ono ni ndi c t me nt ,t oi mpr i s onme ntf orat e r mn ote x c e e d i n gt e ny e ar so rafine( o rb ot h) ; ( b )ons u mma r yc o nv i c t i o n— ( i )i nEng l an dandWal e s ,t oi mpr i s onme ntf orat e r mno te x c e e d i n gt we l v emont hsorafi nen ote x c e e di ngt h e s t a t u t o r ymax i mu m( orbo t h ) ;
( i i )i nS c ot l ando rNor t he r nI r e l and, t oi mpr i s on me ntf orat e r mn ote x c e e di ngs i xmon t hsorafin eno te x c e e di ngt h e s t a t u t o r ymax i mu m( orbo t h ) . RePat r i c k& Ly o nLt d[ 1 933] Cour t st he r e f or es e tt hes t a nda r df ori nt e n tf a i r l yhi gh .Ast h ec ou r te x pl a i n e di nRePat 19 33) , r i c kandLy onLt d( t h i si nv ol v e dp r o vi ng' a c t u a ldi s ho ne s t y , i nv ol vi ng ,a c c or d i ngt oc u r r e ntno t i o nsoff a i rt r a di nga mon gc o mme r c i a l me n ,r e a lmo r a lbl a me ' . Re a c hi n gt hi ss t a nda r dwa sd i ffic ul ta n de v e nt ua l l yan e wpr o vi s i o nwa si nt r od uc e d i n s 2 1 4o f ode a lwi t hwha ti skno wna s' wr on gf u lt r a d i ng' . t heI ns ol ve nc yAc t1 986t App l i c a t i o n AI MEDa td i r e c t or s -S21 4I A1 986, -Doe sn ot r e qu i r ep r o v i n ga ni nt e ntt od e f r a udu nl i ke21 3 -Ope r a t e sont heba s i st h a ta ts omet i meb e f or et hec omp a nye nt e r e di n s o l v e ntl i qui d a t i ont he r ewi l lh a v ebe e nap oi nt whe r et hedi r e c t or sk ne wi twa shop e l e s sa n dt hec o mpa n yc o ul dno tt r a deout oft h es i t u a t i on .Th er e a s o na bl e d i r e c t orwo ul dno ta tt hi spo i ntc on t i n uet ot r a de .I fhed oe sc o nt i nu et ot r a deher i s ksh a v i n gt oc o nt r i bu t et ot h ed e b t s o ft hec o mpa n yun de rs . 21 4. ( a )t hec ompan yha sgo nei n t oi n s ol v e n tl i qu i d at i on: ( b )t ha tb e f or et hec o mme nc e me ntoft hewi n di ngu p,t h edi r e c t o rk ne worou g h tt oha v ec onc l ud e dt h athe r ewa sno r e as on abl ewayo fa v o i d i n gi ns ol v e ntl i q ui da t i o n;and ( c )t hepe r s onwa sad i r e c t orat t het i me : ( 3 )pr ov i de dt hatade c l ar a t i onwi l ln otbemad ei fi ts at i s fie dt h att h epe r s o nt o oke v e r ys t e pt ot r ya ndmi ni mi s et he l o s st oc r e d i t o r s . ( 4 )as s ume dt ob ear e as o na bl yd i l i ge ntpe r s onh av i ngbo t ht hege ne r alk nowl e d ge ,s k i l lan de x pe r i e nc et ob e e x pe c t e dofape r s o nc ar r y i ngouthi sf u nc t i o nsi nr e l a t i o nt ot hec o mp an yan dt heg e ne r al kno wl e dg e ,s k i l lan d e x pe r i e n c et hathei nf a c th as . RePr oduc eMa r k e t i ngCons or t i um Lt d( No2 )( 19 89 ) o v e rape r i odo fs e v e ny e ar st hec o mp anys l o wl ydr i f t e di nt oi ns ol v e n c y . Thet wodi r e c t or si nv o l v e ddi dn ot hi ng wr on ge x c e ptt h att h e ydi dno tp utt h ec ompa nyi n t ol i q ui da t i o naf t e rt hep oi ntofnor e t ur nb e c amea p p ar e n t . Li abl e u nd e rs . 214t oc o nt r i but e£75 , 0 00t ot hede bt so ft hec o mpan y . ffe ri nt hewa yt he ya ffe c t t h e i nc i pl e S a l o monpr s s2 13and2 14di p pl i e st oa n yo nei n v o l v e di nt hec a r r yi ngo noft h eb us i ne s sa n dt he r e f or ed i r e c t l yq ua l i fie st h el i mi t a t i ono f s21 3a l i a bi l i t yofme mbe r s . e sn otd i r e c t l ya ffe c t t hel i a bi l i t yofme mbe r sa si ti sa i me ds pe c i fic a l l ya td i r e c t or s .I ns ma l lc omp a n i e s , s21 4do d i r e c t or sa r eus ua l l ya l s ot heme mbe r so ft h ec ompa n ya nds ot h e i rl i mi t a t i o nofl i a bi l i t yi si ndi r e c t l ya ffe c t e d. Pa r e n tc omp a n i e sma ya l s oh a v et h e i rl i mi t e dl i a bi l i t ya ffe c t e di ft he yha v ea c t e da sas ha do wdi r e c t or ,t h ec ons e q ue nc e so ft r e a t i n gt h ec ompa n ya sas e pa r a t el e ga le n t i t yo rn ot c a nbe Sal o mon,Le eandMac aur ac as e s e x t r e me . Ov e rt i met hej u di c i a r yh a v es wungf r oms t r i c t l ya pp l y i n gt heS a l o monp r i nc i pl ei nt h e s edi ffic ul ts i t ua t i o nst ot a ki n g amor ei nt e r ve nt i on i s t a p pr oa c ht ot r yt oa c hi e vej us t i c ei napa r t i c ul a rs i t u a t i on . Exa mp l eofj u di c i a li n t e r ve n t i o n ] :s ha mCot opo a c hc u s t o me r sf r omol dCo Gi l f or dMot o rCompanyLt dvHor ne[ 19 33 1 962 ]:Coa ss ha mf o rl a nds a l ea v oi dX J one svLi pma n[ 197 6]VI MP DHNLt dvTowe rHa ml e t s[ 197 8] Woo l f s o nvSt r at hc l ydeRC[ 199 0]VI MPd omi na t e st hi nk i ngo fl i f t i n gv e i l Ada msvCa peI ndus t r i e spl c[ 19 92]BCC63 8, ov e r r ul e db yOr Cr e as e yvBr e a c hwo odMot or sLt d[ dvBe l hav e nPubsLt d[ 19 98]
Rat i uvCo nwa y( 20 06) Same ngoTur ne rvJ &HMa r s h& Mc Le nnan( Se r v i c e s )Lt d( 2 00 7)
] Gi l f or dMot o rCompanyLt dvHor ne[ 19 33 For me re mpl oy e ewhowasbou ndb yaCOVn ott os o l i c i tc us t o me r sf r omhi sf o r me re mp l o y e r ss e tu pac o mp an yt o d os o . Hear g ue dt ha twh i l ehewa sb ou ndbyt heCOVt hec ompan ywa snot .Th ec our t f o un dt h att hec o mp anywas me r e l yaf r on tf o rMrHo r neandi s s u e da ni nj un c t i ona g a i ns thi m J one svLi pma n[ 1 962 ] Li p ma nha de n t e r e di nt oac on t r ac twi t hMrJ one sf ort hes a l eofl a nd.MrLi p mant he nc ha ng e dh i smi ndan ddi dn ot wantt oc ompl e t et h es a l e . Hef o r me dac ompa nyi nor d e rt oav oi dt het r ans a c t i o nandc o nv e y e dt hel a ndt oi ti ns t e ad. Het h e nc l ai me dhen ol o ng e ro wn e dt h el andandc oul dnotc ompl ywi t ht hec ont r ac t . Thej u dg ef ou ndt hec ompan y wasbut af a ç a deorf r o ntf orMrLi p ma nan dg r ant e dano r de rf o rs pe c i ficpe r f o r ma nc e Ex ampl e ,as i t u a t i onwhe r eZLt d( t h epa r e n to rhol d i ngc omp a n y )ownsa l lt h ei s s ue ds h a r ec a p i t a li nt hr e eo t h e r c ompa ni e s-ALt d ,BLt da ndCLt d .Th e s ec o mpa n i e sa r ekn o wna swh ol l yo wn e ds ubs i d i a r i e s( s . 1 159 ( 2 )CA2 006 ) . ZLt dc o nt r ol sa l lt hr e es ub s i di a r i e s .I ne c o nomi cr e a l i t yt he r ei sj us ton ebu s i n e s sb uti ti so r ga n i s e dt hr oug hf ou r s e p a r a t el e g a l pe r s ona l i t i e s . Al l owst h ea dv a n t a g e so fl i mi t e dl i a b i l i t yt ob ea v a i l e do fb yt h el e g a lp e r s on a l i t yoft hep a r e n tc ompa ny .Asar e s ul t t h epa r e ntc oul dc ho os et oc on duc ti t smo r er i s k yorl i a bi l i t yp r o nea c t i v i t i e st hr o ughALt d .Th es t r i c ta pp l i c a t i o nof t h eSa l omonp r i n c i p l ewo ul dme a nt ha ti ft hi n g sgowr ongt h ea s s e t so fZLt d, a sas ha r e ho l d e rofALt dwi t hl i mi t e d l i a bi l i t y ,i nt he or yc a nn otb et ou c h e d a ni ngo f" s ub s i di ar y "e t c 1 15 9Me ( 1 ) Ac o mp anyi sa" s ub s i di ar y "o fa no t h e rc ompa ny ,i t s" h ol di n gc ompan y " , i ft ha tot h e rc ompa ny — ( a ) h ol dsama j o r i t yof t hev ot i ngr i g ht si ni t , or ( b ) i same mb e rof i tan dha st h er i g h tt oap po i n to rr e mo v eamaj or i t yofi t sbo ar do fdi r e c t or s , or ( c ) i same mbe rofi tan dc o nt r ol sal on e , pu r s ua ntt oanag r e e me nt wi t hot he rme mb e r s ,amaj or i t yo ft h ev ot i ngr i g ht s i ni t , o ri fi ti sas ubs i d i ar yo fac ompa nyt hati si t s e l fas ub s i di ar yoft h atot he rc omp any . ( 2 ) Ac o mp anyi sa" wh ol l y owne ds ubs i d i ar y "ofan ot he rc o mpan yi fi tha sn ome mbe r se x c e ptt h atot he ran dt hat o t h e r ' swho l l y own e ds u bs i di a r i e sorpe r s o nsac t i n gonb e hal foft hatot he rori t swh ol l y o wne ds ub s i di ar i e s . ( 3 ) S c he du l e6c on t a i nspr o v i s i on se x pl ai n i n ge x p r e s s i on su s e di nt h i ss e c t i onan dot he r wi s es u ppl e me n t i ngt hi s s e c t i o n. ( 4 ) I nt hi ss e c t i ona ndt ha tS c he dul e" c omp any "i n c l u de sanybo dyc o r p or a t e . DHNLt dvTowe rHa ml e t s[ 1 97 6] De nn i n ga r g ue dt ha tagr o upo fc o mpa ni e swa si nr e a l i t yas i n g l ee c on omi ce n t i t ya nds ho ul dbet r e a t e da so ne . pe c i fic a l l yd i s a p pr ov e dofDe nni ng ' sv i e wsongr ou ps t r u c t u r e s HLi nWo ol f s onvSt r at hc l y deRC[ 1 97 8]SLT1 59s i nfin di n gt ha tt hev e i lofi nc or por a t i o nwou l db euphe l dunl e s si twa saf a ç a de .Ve i ls ho ul don l yb epi e r c e dwh e r e t h e r ea r es p e c i a lc i r c ums t a n c e sa mou nt i ngt oame r e' f a c a de ' d i s gui s i ngt r u ef a c t s .Th i spr i nc i pl emi g htmos te a s i l yb e r e pr e s e nt e da sd e pe ndi n go n' a b us i v e ' c o ndu c t . Ada msvCa peI ndus t r i e spl c[ 1 990 ] Unt i l1 979 ,Ca pe ,anEng l i s hc ompan y ,mi ne dan dma r k e t e das b e s t os .I t swor l dwi d emar k e t i ngs ub s i di ar ywa s a no t h e rEn g l i s hc ompa ny ,n ame dCap as c o. Or i g i n al l yUSs u bs i di a r ywasf o un dLf o ras b e s t osr e l at e di nj ur i e s .Al t e r r e s t r uc t ur e dan dr e mo v e dUSpr e s e n c e .Ot he r st h e nl i t i gat e dag ai ns tCap ei nUK Ke yi s s uewa swhe t he rCa pewa spr e s e n twi t hi nt heUSj ur i s d i c t i ont hr o ughi t ss ub s i d i a r i e so rha ds ome h ow s u bmi t t e dt ot heUSj ur i s d i c t i on. Ac c or di ngt ot heCAt ha tc ou l do nl yb et hec a s ei fi tl i f t e dt hev e i lofi nc or p or a t i on ,
e i t h e rt r e a t i ngt heCa p egr ou pa son es i ng l ee n t i t y , orfin di ngt hes ubs i d i a r i e swe r eame r ef a ç a deorwe r ea g e n t sf or Ca p e . Cour tf o un dt ha ti nc a s e swh e r et h ec ou r t sha di nt hepa s tt r e a t e dag r o upa sa' s i ng l ee c on omi cu ni t ' , t husdi s r e g a r di ng t h el e ga ls e pa r a t e n e s sofe a c hc o mpa n yi nt heg r o up,t hec o ur twa si n v o l v e di ni n t e r p r e t i ngas t a t ut eo rd oc ume n t( s e e b e l ow) . Thi se x c e p t i o nt oma i n t a i n i n gc or p or a t epe r s ona l i t yi sq ua l i fie db yt hef a c tt ha tt h e r eha st ofir s tb es omel a c k o fc l a r i t ya b ou tas t a t ut eord oc ume n twhi c hwou l da l l o wt hec o ur t t ot r e a t ag r o upa sas i n g l ee nt i t y .Thec o ur t c on c l ude dt ha ta l t ho ughCa p e ' smot i v ewa st ot r yt omi n i mi s ei t spr e s e n c ei nUSf o rt axa n dot he rl i a bi l i t i e s( a ndt ha t t h a t mi ghtma keComor a l l yc u l p a b l e )not h i ngl e ga l l ywr ongwi t ht h i s . t i g at i ngf ac t or sf orno tr e mov i ngv e i l . Adamsmi CAr e c o gn i s e dt he' me r ef a ç a d ec on c e a l i n gt h et r u ef a c t s ' a sbe i ngawe l l e s t a bl i s h e de x c e p t i o nt ot heSal o mon sc l a s s i ce x. p r i n c i p l e . Thec a s eo fJ one svLi pmani I nd e t e r mi ni ngwh e t h e rt hec ompa n yi same r ef a ç a det h emo t i v e so ft h os eb e hi nd ,l oo ke da tt hemot i ve sofCa p ei n s t r uc t ur i ngi t sUSb us i ne s st h r o ug hi t sv a r i ou ss u b s i di a r i e sa l t h oug hCa pe ' smo t i v ewa st ot r yt omi ni mi s ei t sp r e s e nc e i nt h eUSf ort a xa ndo t h e rl i a b i l i t i e st he r ewa sno t hi n gl e g a l l ywr on gwi t ht h i s . Adamsag e nc yar gume nt s t r a i g ht f or wa r da p pl i c a t i ono fa ge nc yp r i nc i pl e . I ft hes u bs i d i a r ywa sCa p e ' sa ge n ta nda c t i ngwi t hi ni t sa c t ua lor a pp a r e nta ut h or i t y ,t he nt hea c t i on so ft h es ub s i di a r ywou l dbi ndt hepa r e nt .Th ec ou r tf o undt h a t t h es ub s i di a r i e s we r ei n de pe nde n tbu s i ne s s e sf r e ef r omt heda yt o-da yc on t r o lofCa p ea ndwi t hnog e ne r a lp o we rt ob i ndt hepa r e nt . The r e f or eCa pec o ul dno tbepr e s e nti nt heUSt h r o ug hi t ss ub s i d i a r ya g e n t . h e r e f o r ena r r o wst h es i t u a t i on swhe r et hev e i lo fi nc or p or a t i o ni si ne ffe c tl i f t e dt ot h r e es i t ua t i o ns Ada mst 1 . Wh e r et hec o ur ti si nt e r pr e t i ngas t a t ut eord oc ume nt ( t hu so nc ef a i r ne s si sr e j e c t e da st heb a s i so fi nt e r v e n t i o nonl y al a c ko fc l a r i t yi nt h es t a t ut eordo c u me ntwi l la l l o wi nt e r v e n t i o n) . 2 . Wh e r et hec o mpa n yi same r ef a ç a de . 3 .Whe r et hes u b s i d i a r yi sa na g e nto ft hec o mpa n y . ,ne wc a s e s Ada ms e p a r t sf r o mAda ,b uto v e r r ul e db yOr Cr e as e yvBr e a c hwo odMot or sLt d[ 199 2]BCC638d ms dvBe l hav e nPubs Lt d[ 19 98] n o ws i g nst hec o ur t ss e e mt ober e l a xi ngt h es t r i c ta pp r oa c ht a k e ni nAda ms Rat i uvCo nwa y( 20 06) Same ngoTur ne rvJ &HMa r s h& Mc Le nnan( Se r v i c e s ) Cr e as e yvBr e a c hwo odMot or sLt d[ 199 2] Cr e a s e ywa sd i s mi s s e df r o mh i sp os to fg e ne r alma nag e ratBr e ac hwoodWe l wy nLt d. Hec l a i me dt ha tt hi sc o ns t i t u t e d wr on gf u ld i s mi s s al ,i nbr e a c hofhi se mpl o y me ntc o nt r ac t .Howe v e r ,b e f or ehec oul dc l ai m,Br e ac hwo odWe l wy nLt d c e as e dt r a di ng ,a nda l las s e t swe r emov e dt oBr e ac h woodMot or sLt d,wh i c hc o nt i nue dt heb us i ne s s .Ot he rc r e d i t o r s we r ep ai doff, butnomon e ywasl e f tf o rMrCr e a s e y ' sc l ai m,wh i c hwa sn ot de f e nd e da ndh e l ds u c c e s s f uli nano r de r f or£ 53 , 8 35ag ai n s tBr e ac hwo odWe l wy nLt d.MrCr e as e yap pl i e df o re nf or c e me n to ft hej u dg me n ta g a i n s t Br e ac h woodMot or sLt dandwass uc c e s s f ul .Br e ac hwoodMot or sLt dap pe al e d. Li f t e dt h ec or por a t ev e i lt oe nf or c eMrCr e a s e y ' swr ong f uld i s mi s s a l c l a i m.Heh e l dt h a tt hedi r e c t or sofBr e a c hwoo d Mot or sLt d ,whoh a da l s ob e e nd i r e c t o r so fBr e a c hwoo dWe l wynLt d ,ha dt he ms e l ve sd e l i be r a t e l yi g nor e dt he s e p a r a t el e g a l pe r s ona l i t yo ft hec o mpa n i e sbyt r a n s f e r r i nga s s e t sbe t we e nt h ec omp a ni e swi t ho utr e g a r dt ot he i rd ut i e s a sdi r e c t or sa nds ha r e ho l d e r s . t a t e sCr o ng . Or dvBe l hav e nPubss e a s e ywr Mra ndMr sOr dr ant h eFoxI nni nS t a mf o r d, Li n c o l ns hi r e .Th e ywe r ei nanon g o i ngd i s put ewi t ht hef r e e h ol down e r ,
Be l h av e nPub sLt d, f ormi s r e pr e s e nt at i o nabo utt h el e v e l pr o fit abi l i t yoft h ep ub. Howe v e rBe l ha v e nPubsLt dwa s p ar to fac omp anygr oups t r u c t ur et h ath adb e e nr e or g a ni s e d ,an dha dnoa s s e t sl e f t .Mra ndMr sOr dr e que s t e dt h at ac o mp an ywi t hmo ne y ,As c ot tHol di ng sLt d,b es ub s t i t u t e df orBe l ha v e nPubsLt dt oe nf o r c et hej u dg me n t .Atfir s t i n s t anc et hej ud g egr an t e dt h i so r de r . Be l h av e nPub sLt dap pe al e d. CAo ve r t ur ne dt hej u dg ea ndh e l dt ha tt her e or ga n i s a t i onwa sal e gi t i ma t eon e , a n dnot do net oa v oi da ne xi s t i ng o bl i ga t i on. Ho bh ous eLJa r g ue dt ha tt her e or ga n i s a t i on ,e ve nt hou ghi tr e s ul t e di nBe l ha ve nPu bsLt dh a vi n gno f u r t he ra s s e t s , wa sdo nea spa r tofar e s po ns et ot hegr oup ' sfin a n c i a lc r i s i s . noul t e r i o rmo t i v e . Rat i uvCo nwa y( 200 6) s o l i c i t orac t e df o ro nec o mp an y( R)t hr o ug hano mi ne ec o mp an y( C) .I twa sal l e ge dt ha tt hes o l i c i t orhadac on fli c tof i n t e r e s twi t hR. Thes ol i c i t or ' sar g ume n tt h ath eo we dnofid uc i a r ydu t i e st oRa sh ewasn ote mpl oy e dbyRwas r e j e c t e d. Li f t i n gt hec or po r a t eve i l ,whe r et h ef a c t sr e qu i r e di t , t oi nc l udet hos ei norbe hi ndac o mp a n ywhowe r ei nr e a l i t yt h e p e r s on swh os et r u s ti na ndr e l i a nc eo nt hefid uc i a r ymi gh tb ec on f ou nd e d . c on s i d e r e db ot hl i f t i n gt h ec or po r a t eve i l a ndbr e a c hoffid uc i a r ydu t y . Thec or p or a t ev e i lwa sl i f t e da shewa sa wa r ea l la l ongt ha th ewa sa c t i n gf o rR,t hepe r s onb e hi ndc o mp a n yC. Same ngoTur ne rvJ &HMar s h& Mc Le nnan( Se r v i c e s )Lt d( 2 00 7) p s e udov e i ll i f t i n gs oe mpl o ye r sc a ns u eb a s e donadi ffe r e nte n t i t yi ng r o up CAi nSa ma ngo Tur ne rvMar s h& Mc Le nna n a ne mp l o y e rc ano nl ys u eane mpl oy e eo nmat t e r sr e l a t i n gt oi n di v i d ualc ont r a c t sofe mpl oy me nti nt h e i rc oun t r yof d omi c i l e .I th e l dt h a t ,i nt h i sc a s e , t hi se xt e n de dt oc o mpa ni e si nt h emu l t i n a t i on a l gr ou pofwh i c ht hee mpl o y e r f o r me dpa r t . I nr e a c hi ngt ha tde c i s i on ,t heCou r ts t a t e dt ha tt h ef a c tt h a tot he rc o mp a n i e si nt heg r oupc o ul dbet r e a t e d a se mpl o ye r sf ort hep ur p os e soft heBr us s e l sR...