IAHP Group Holdings Limited (in Liquidation), Re

Mr Justice Mellor: INTRODUCTION

1. On 31 July 2025, in the Interim Applications Court, and on the application of the Applicants as Joint Liquidators of IAHP Group Holdings Limited (‘ the Company ’ and ‘ the Liquidators ’), I granted an Order containing a proprietary injunction, a worldwide freezing order and provisions for disclosure of information against the Respondents. These are my reasons for making that Order.

2. On the facts, and due to the risk of dissipation (explained below), I was satisfied that I should hear the application and make the Order despite no notice having been given to the Respondents. As usual, the Respondents have the usual ability to apply on notice to the Applicants’ legal representatives to set aside or vary this Order. Counsel supplied me with a very useful and full skeleton argument in advance of the hearing, and I heard oral submissions from both Mr Davies KC and Mr Timson, over a period of around 2 hours. In view of their concerns over possible attacks which the Respondents might make on full and frank disclosure, I encouraged Counsel to address those matters fully and, at least from my perspective, they did so. I explain these considerations in further detail below. BACKGROUND

3. The Company was incorporated on 2 October 2020. It was the holding company for a group of companies collectively known as the “RDCP Group”. By way of background I was shown the Group Structure from about mid-late 2023 by way of contrast with the current structure, from which it is apparent there is no value left in the group. A winding up petition was presented against the Company on 2 February 2024 (“ Date of Presentation ”). The Company was wound up by order dated 20 March 2024. The liquidators were appointed as provisional liquidators on 26 February 2024 and as full liquidators on 17 April 2024. At all material times, the Respondents, who are husband and wife, were the only acting directors and shareholders of the Company, subject to one point which I mention in the next paragraph.

4. On the Date of Presentation, the Respondents: i) caused the Company’s name to be changed from RDCP Group Limited to its current name; ii) filed notices at Companies House purporting to terminate their appointments as directors with retroactive effect from 15 January 2023 (over 12 months earlier); and iii) purported to appoint the nanny of their children, Ms. Svitlana Turchyn, as a director with retroactive effect from 15 January 2023.

5. There is no statement of affairs and it is relatively early days in the liquidation. The Liquidators’ current estimated deficiency is around £11m, although only approximately £1,199,269 is owed to creditors unconnected to the Respondents.

6. The underlying claim for misfeasance is brought by the Liquidators under s.212 of the Insolvency Act 1986 (‘ IA ’) on the basis that the Respondents have misapplied the Company’s funds in breach of their duties as directors. I was told that the Particulars of Claim in the bundle were produced on the usual basis that, as s.212 is a summary remedy, a claim is usually initiated by application notice and a supporting witness statement but often proceeds thereafter by way of pleadings. So the Applicants expect that the court will direct the service of statements of case in due course. Having said that, the case as expounded in the Particulars of Claim was fully explained in the extensive evidence before me (as recorded in the Order) and in the Skeleton Argument. THE LIQUIDATORS CASE IN SUMMARY

7. In essence, the Liquidators’ case can be summarized as follows: i) At all material times, the Respondents were directors of the Company (their alleged resignations on the Presentation Date with purported retroactive effect was window-dressing, with no effect on their status as de facto directors). ii) As such directors, they owed it the duties set out in ss.171 to 177, 386 and 388 of the Companies Act 2006 and at common law including a continuing duty to account for its assets and to explain their dealings with its property. iii) Between 9 May 2021 and 5 February 2024, the Respondents treated the funds of the Company as available when needed to be diverted unlawfully for their own use and benefit and without regard (or, alternatively, without due regard) to its interests. For this purpose, they operated what they described as “directors’ loan accounts” with the Company (“ DLA ”). The Liquidators’ case is that the DLA was not a true loan account (i.e. properly so-called) but a misleading label to conceal a long series of unlawful diversions of the Company’s property to or for the Respondents’ benefit/convenience (“ Diversions ”). It is said that even a cursory review of the descriptions of items of expenditure in Annexes 1G and 1H to the POC reveals a wide range of random personal expenditure and round sum withdrawals. iv) After much detailed analysis, the liquidators’ forensic team have identified Diversions in the total sum of £4,143,419.26 caused or allowed by the Respondents in breach of their duties. The Company has suffered loss in at least this sum. A substantial sum in interest is claimed in addition which continues to accrue at a daily rate of £908.15. v) If and in so far as, contrary to the liquidators’ primary case, any of the Diversions constituted repayments of a loan or loans (properly co-called) to one or both of the Respondents, the liquidators’ case is that they caused or allowed the Company to become indebted to them in breach of their duties as its directors, such that any such loans were not properly repayable by the Company. vi) Further, the Diversions were received to or for the benefit of the Respondents in circumstances which gave rise to an immediate remedial constructive trust of the same for the benefit of the Company. APPLICABLE PRINCIPLES

8. The principles I had to apply fall into the following categories. Unlawful distributions

9. In support of their primary case that, when the Respondents’ conduct is viewed as a whole, the Diversions were ultra vire s, unlawful and therefore unratifiable, I was referred to the following extract from the opinion of Lord Walker in Progress Property v Moore [2011] 1 WLR 1 (SC) (a case dealing with only one transaction but analysing the authorities and principles exhaustively – emphasis added): "1. A limited company not in liquidation cannot lawfully return capital to its shareholders except by way of a reduction of capital approved by the court. Profits may be distributed to shareholders (normally by way of dividend) but only out of distributable profits computed in accordance with the …. Companies Act 2006 Whether a transaction amounts to an unlawful distribution of capital is not simply a matter of form. As Hoffmann J said in Aveling Barford Ltd v Perion Ltd [1989] BCLC 626 , 631: "Whether or not the transaction is a distribution to shareholders does not depend exclusively on what the parties choose to call it. The court looks at the substance rather than the outward appearance. Similarly, Pennycuick J observed in Ridge Securities Ltd v Inland Revenue [1964] 1 WLR 479 , 495: "A company can only lawfully deal with its assets in furtherance of its objects. The corporators may take assets out of the company by way of dividend, or, with the leave of the court, by way of reduction of capital, or in a winding up. They may, of course, acquire them for full consideration. They cannot take assets out of the company by way of voluntary distribution, however described, and, if they attempt to do so, the distribution is ultra vires the company"…. 15….The rule is essentially a judge-made rule, almost as old as company law itself, derived from the fundamental principles embodied in the statutes by which Parliament has permitted companies to be incorporated with limited liability….. 16 Whether a transaction infringes the common law rule is a matter of substance, not form. The label attached to the transaction by the parties is not decisive. That is a theme running through the authorities, including Ridge and Aveling …. …… 27 …. But in cases of this sort the court's real task is to inquire into the true purpose and substance of the impugned transaction. That calls for an investigation of all the relevant facts, which sometimes include the state of mind of the human beings who are orchestrating the corporate activity. 28 Sometimes their states of mind are totally irrelevant. A distribution described as a dividend but actually paid out of capital is unlawful, however technical the error and however well-meaning the directors who paid it. The same is true of a payment which is on analysis the equivalent of a dividend. Where there is a challenge to the propriety of a director's remuneration the test is objective….but probably subject in practice to what has been called a 'margin of appreciation'. If a controlling shareholder simply treats a company as his own property….his state of mind (and fellow directors) is irrelevant. It does not matter whether they were consciously in breach of duty, or just woefully ignorant of their duties. What they do is enough by itself to establish the unlawful character of the transaction.” Directors Duties

10. In addition to the statutory duties I have already mentioned, the Applicants also relied on the separate fiduciary obligation which a director owes to cause the company to keep proper records of its transactions, and to provide an account of his own dealings with company property, of which he is treated as being a trustee ( Re Shahi Tandoori Restaurant Ltd [2021] EWHC 337 (Ch) ; [2021] All ER (D) 31 (Mar) at [32]). For this reason, it is the obligation of a director once payments have been identified for the director to demonstrate that such payments were legitimate. In this case therefore, the burden of proof rests on the Respondents to satisfy the court that transactions are legitimate ( Re Idessa (UK) Ltd [2011] EWHC 804 (Ch) ; [2012] 1 BCLC 80 at [28]).

11. In Re Bronia Buchanan Associates Ltd [2021] EWHC 2740 (Ch) ; [2022] 1 B.C.L.C. 501 at [85] to [86], the court held that it was not open to a director to recreate history (i.e. the basis upon which they have historically received money from a company). In this context, as explained by Arden LJ in Wetton (as liquidator of Mumtaz Properties Ltd) v Ahmed [2011] EWCA Civ 610 ; [2012] 2 BCLC 109 at [14], the court can draw inferences from the absence of contemporaneous documents supporting their case. The Interim relief sought

12. I do not propose to lengthen this judgment with the familiar principles applicable to the grant of the interim relief here. To the extent that it is necessary to refer to particular points, I do so below. THE ISSUES IN MORE DETAIL

13. As part of the detailed investigations which have been carried out by the Liquidators into the affairs of the Company, there has been substantial correspondence between the parties which was initiated by the letters dated 18 September 2024 sent by the Liquidators’ solicitors to each Respondent. In those initial letters, in order to explain the Respondent’s alleged liability to restore funds to the Company, the various payments in and out of the Company’s bank account were labelled Category A to M Payments. The same Categories are used in the Particulars of Claim.

14. The Particulars of Claim set out the Liquidators’ case on breach of duty and their case in support of the proprietary claim namely that the Respondents are constructive trustees for the Company in respect of the ‘Diversions’ specified in Categories B-D and F-M. Injections of funds into the Company

15. Categories A and E contain credits – payments into the Company’s bank account. At the hearing, Counsel focused particularly on the six payments in Category A which total £3,895,124.24. As can be seen each of the six payments is substantial:

16. By contrast the credits in Category E are smaller, the largest being £45,000, and the total credits are £179,767.85. Payments out – The Alleged Diversions

17. The payments in Categories B-D and F-M are all payments out of the Company. In the Particulars of Claim, as I mentioned, these are all alleged to be “Diversions”.

18. Category B contains payments to Mr Rizvi which total £384,776.47. Most of the payments are round figures - £10k, £15k, £20k, £50k etc and most are described as either Director Salary or Director Withdrawal. The Respondents have admitted that all these payments were made to Mr Rizvi.

19. On the morning of the hearing I received Mr Dennis’ second witness statement which provided an update on three matters. The first concerned the Preliminary Information Questionnaire which Mr Rizvi completed on 10 May 2024. The Official Receiver supplied a copy to the Liquidators on 30 July 2025 and it discloses that Mr Rizvi’s gross remuneration from the Company in 2022 was £6,629.64 and in 2023 was £9,074.66, figures which the Liquidators accept and which they contrast, naturally enough, with the Category B total. Counsel made it clear that those payments had already been accepted so that the claim is net of those figures.

20. Category C contains payments to Ms Dubylovska which total £186,545.84. Again, most are round figures, and most are described as either Director Salary or Director Withdrawal. Again, the Respondents have admitted that all these payments were made to Ms Dubylovska.

21. The payments in Category D were paid by the Company to various third parties and total £1,767,251.63. It is the Liquidators case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that the Category D payments were for Mr Rizvi’s personal benefit.

22. The payments in Category F were paid by the Company to various third parties and total £51,261.49. It is the Liquidators’ case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that the Category F payments “ are payments applicable to Mr. Rizvi’s DLA and that the Rizvi DLA account is reduced by an equal amount ”.

23. The payments in Category G were paid by the Company to various third parties and total £1,005,941.16. It is the Liquidators case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that some £520,921.00 of the Category G payments “ are payments which Mr. Rizvi agrees should be set of against the Rizvi DLA ”.

24. The position for the payments in Category H, which total £267,059.06, is the same as for Category F.

25. For the Category I payments in the net sum of £201,090.87, the Liquidators’ case is the same as for Categories D, F, G and H. The Respondents have admitted in correspondence that the sum of £136,090.87 “ should be applied to reduce the balance of the Rizvi DLA ”.

26. The Category J payments, in the net sum of £125,531.87, are alleged to have been paid by the Company for personal assistance to directors who did not undertake work for the benefit of the Company. The Liquidators say that there are no employment or engagement contracts in records that have been identified in respect of these payees and/or the associated PAYE and pension costs.

27. The Category K payments, in the net sum of £138,794.13, were paid by the Company to various third parties. They constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in the Letter of Response that the sum of £73,564.70 contained within the Category K payments: “ must be deducted from the Rizvi DLA ”.

28. The Category L payments, in the net sum of £8,338.00, were paid by the Company and relate to payroll costs related to the Second Respondent. It was confirmed by the Respondents under cover of a document supplied by email on 31 May 2024 that the Second Respondent: “ has not worked formally in the business since December 2019. She has been a full-time mother to 4 children since the birth of her first child in February 2020 ”. On that basis, the Liquidators contend that these payments do not constitute legitimate business expenditure and constitute costs relating to personal payments to the Second Respondent.

29. Finally, the Category M payments, in the net sum of £118,962.49, were paid by the Company and are non-business-related payroll costs in respect of the employees paid by the Company who did not do work for the benefit of the Company. On this basis, the payments do not constitute legitimate business expenditure.

30. Overall, it appeared to me to be strongly arguable that the Particulars of Claim reveal a wide range of random personal expenditure and round sum withdrawals.

31. The total of all the Diversions pleaded in the Particulars of Claim is £4,255,553.01, a figure which I understand is to be revised down slightly to the figure I identified in the summary above of £4,143,419.26.

32. It can be seen from the above that there is no dispute as to the position of nearly all the payments out. The justification for them is that they have to be set off against the payments into the Company made by Mr Rizvi. His case is that these were all shareholder loans to the Company. The position of the Second Respondent.

33. I can deal with this relatively briefly. In correspondence, the Respondents have now accepted that Ms Dubylovska had no executive role in the Company. It has been alleged she was a non-executive director and that therefore she was entitled to some remuneration when making strategic decisions. This is not accepted by the Liquidators because they say there is no material, formal or informal, to suggest that she made or was involved in any strategic decisions on behalf of the Company. At the very least, they say there is nothing to justify the payments to her detailed in Category B. Throughout it should be remembered this was just a holding company. The position of the First Respondent.

34. I have covered his position on the payments out above and I now turn to consider the position of the payments in in Category A. These have been the subject of lengthy letters in the correspondence between the parties.

35. By way of background, it was explained that Mr Rizvi has a high digital profile and likes to portray himself as something of a guru when it comes to private investment and acquisition of businesses. His acquisition of certain companies lies behind the first five Category A payments.

36. The first payment of £620,532, received on 3 June 2021, is said to be the surplus left over from the acquisition of AHP, evidenced by a copy of the Company’s bank statement which contains an entry on 3 June 2021, referenced to “Hempsons…AHP Surplus”. Counsel characterized this and indeed all the first five Category A payments as very unusual because as acquirer/purchaser of the relevant business, you do not receive moneys. What has happened in these instances is that surplus funds were left over from those received from finance companies to fund the relevant acquisition (Close Brothers and Hitachi). Counsel made clear that he could not say that some of these funds were not Mr Rizvi’s own funds but that all one knows is that those finance companies financed the acquisition of AHP and there is a surplus, which Mr Rizvi pays into the Company.

37. Counsel took me through the explanations put forward by the Respondents’ in the correspondence for this first payment. I will not set out all the passages because they are long and, as Counsel submitted, somewhat prolix. I should add that the responses on behalf of the Respondents came from RD Capital Partners LLP, but were clearly written by lawyers with experience in this field. The key passages are in the response dated 18 October 2024 (‘the Initial Response’) to the letter before action of 18 September 2024 in section 2.1 (at p307-8 of the Hearing Bundle): ‘(g) On 3 June 2021, AHP Holdings loaned £620,532 to M/S RD Partners India, an Indian company with its registered address at 328, Khair Nagar, Meerut, 250002, Uttar Pradesh ( RDCP India ). RDCP India, in turn, on-loaned those monies to Mr Rizvi, who in turn on-loaned those monies to IAHP. To avoid multiple bank transfers, the funds were transferred direct to IAHP on behalf of and at the direction of Mr Rizvi. (h) While no loan agreements were entered into at the time, the receipt of the loan by RDCP India from AHP Holdings and the subsequent on-loan to Mr Rizvi are both evidenced by RDCP India’s audited accounts for the financial year ending 31 st March 2022, a copy of which is attached at Appendix 1 .’

38. In fact, the relevant document is labelled as the first of two ‘Appendix 2’ (at p336) which reveals that RDCP India is not an Indian company but a partnership. The document is a somewhat poor photocopy of a print of an electronic document. The Liquidators do not accept the document was genuinely created in July 2022 and have requested sight of the metadata for the original and for the partnership deed. The request was acknowledged by the Respondents, but nothing has been produced.

39. In response to this dated 20 December 2024, (at p408-9) the Liquidators first explained that the effective source of the monies used to acquire AHP were Close Brothers and Hitachi, and continued as follows: ‘19. We note a complete absence in the Initial Response of contemporaneous documentation in respect of the substantial loans and connected party dealings in his case. In considering the Initial Response, we have been able to identify the following further contemporaneous matters.

20. Paragraphs 2.1(b), (c), (d) and (e) of the Initial Response in respect of the 3 June 2021 Cat A Payment are irrelevant.

21. Based on the information provided by Hempsons, the denial at paragraph 2.1(f) of the Initial Response cannot be correct – the source of the funds that were ultimately received by the Company appears to be working capital funds arising from the acquisition of 95% of the share capital of Ancient House Printing Group Limited.

22. We have obtained the statutory accounts of AHP Print Holdings Ltd (then known as RDCP Investments 6 Limited) to 28 February 2022 to seek to validate paragraph 2.1(g) of the Initial Response: a. If this company was due £620,532 from RDCP India, this would be disclosed in these accounts. b. The only assets of this company are “investments” of £5,129,445 and “debtors” of £2 i. A loan would not be an investment. ii. A loan would be a debtor. There are only £2 of debtors. c. the only related party transaction disclosed are the sum of £4,254,245 due to a related party, Ancient House Press plc.

23. We note, despite the complexity of the financial arrangements, and that professional advice (financial and legal) was being received by the Company at the time, there is an absence of contemporaneous loan agreements, as acknowledged by paragraph 2.1(h) of the Initial Response. Paragraph 2.1(j) of the Initial Response is on this issue meaningless.

24. The contemporaneous evidence available to the Liquidators (namely, the accounts of AHP Print Holdings Limited, records supplied by Hempsons, and the Company’s books and records) clearly show that the movement of these monies bears no resemblance to paragraph 2.1(g) of the Initial Response.’

40. Based on this, Counsel made the following submission. He invited assumptions that the Indian partnership existed and its accounts are accurate, but submitted there is still nothing anywhere to show that Mr Rizvi made this shareholder loan in the sum of £620k to the Company. Counsel characterised the explanation as an archetypal after the event reconstruction, but even if it is not, Mr Rizvi still needs to establish the personal loan from him to the Company, without which he has no set-off.

41. Counsel spent time on this first Category A payment because he submitted that the other payments in the first five are of the same ilk. In each case, it is said on behalf of Mr Rizvi that this strange arrangement with the Indian partnership meant that, one way or another, Mr Rizvi was lending substantial sums to the Company. The ‘money-go-round’ in each of the five instances was that funds were sitting in the client account of the solicitors acting for the vendor and/or purchaser of the target company. Mr Rizvi’s case is that the target being purchased (in one case the purchaser) agreed to loan money to his Indian partnership in India, his partnership agreed to lend the money to Mr Rizvi personally and he on-lent the money to the Company, albeit for convenience the money was paid direct to the Company. The Liquidators’ case is that this ‘money-go-round’ was pure fiction, alternatively not something which they recognise as creating any legal rights, let alone the supposed debtor/borrower relationship as between the Company and Mr Rizvi.

42. Counsel made it clear that even if the Respondents were present, they would not be able to point to any documentation at all to support any of these loans in the first five occasions. Furthermore, the explanation also begs the question why the target would be lending money at all, let alone to the Indian partnership and why the Indian partnership is relevant at all.

43. In this regard, my attention was invited to the further response from the Respondents in their letter of 24 February 2025 (which starts at p419) on the role of the Indian partnership at p437: ‘18.1 It is mistaken to suggest that Mr Rizvi’s relationship with RDCP India is “irrelevant” to whether the Category A Payments were genuine injections by him. On the contrary, if RDCP India functioned as a conduit, that fact is critical to establishing beneficial ownership. Even if the Liquidators dispute the precise route by which Mr Rizvi received these monies—whether via RDCP India or directly from external sources—the essential truth remains that IAHP did not acquire these funds from any external party in its own right. At the moment IAHP received them, the funds belonged beneficially to Mr Rizvi. 18.2 Whenever money originates from third ‐ party companies outside IAHP’s group—whether routed through RDCP India or paid directly to Mr Rizvi—the beneficial entitlement vests in Mr Rizvi prior to reaching IAHP. In other words, IAHP had no prior claim to these sums and did not receive them as a direct borrower or payee from an external company. Consequently, IAHP’s lender or “injection source” was Mr Rizvi, with RDCP India (if involved) acting merely as facilitator. If the Liquidators dismiss RDCP India’s role entirely, they must still demonstrate that someone other than Mr Rizvi directly funded IAHP—a proposition unsupported by any contemporaneous documentation.’

44. Mr Davies KC described this and the correspondence generally as sophisticated, in the sense that it is designed to present a veneer of verisimilitude but on analysis, it simply does not follow that because the Company cannot establish a beneficial interest in these moneys they must have been loaned by Mr Rizvi to the Company. What the Liquidators can say is that whoever owns these moneys, they are not owed to Mr Rizvi under some loan agreement and that is all they need to say to defeat the set-off argument.

45. The further point made is that, virtually throughout the correspondence, the Respondents appear to place the burden on the Liquidators to show that the Company has a beneficial interest in the monies paid in. However, the situation is that the Liquidators have inherited a series of inflows, but there is nothing to substantiate that they were lent by Mr Rizvi personally.

46. So far as the sixth payment in Category A is concerned, of £240,998.24, it is the Liquidators’ position that this sum is not available for set-off in favour of Mr Rizvi because it was never received by the Company. In the letter before action, it was explained that this sum does not appear in the Company’s bank statements and appears to be a manual journal entry.

47. The response is long but, in broad terms, it is said was that the £240k figure was a provisional manual journal entry but the correct amount should be £475,523.55. Counsel submitted this was, once again, a similar loan out of the surplus of moneys required elsewhere to acquire a target.

48. As Counsel also submitted, we appear to have gone from a journal entry not supported by any receipts at all, to a completely different argument as set out in the Initial Response. The response concludes with this contention: ‘(k) All available evidence validates the fact that these monies were advanced as loans by Mr Rizvi to IAHP, and that the balance of £475,523.55 remains owing to Mr Rizvi. Nothing has been provided by Horwich Farrelly Limited or the Liquidators to validate any alternative position.’

49. This explanation does not relate to the journal entry itself, but, more importantly, there are no contemporaneous documents at all to support this, whether board minutes, loan agreements, or anything else.

50. I was also shown the response from the Liquidators in the HF letter dated 20 December 2024, at paragraphs 54-59. I will not set out the detail which is based on records supplied by Gunnercooke, but what is said appears to support fully the conclusion at 59: ‘59. The contemporaneous evidence available to the Liquidators (namely, records supplied by Gunnercooke and the Company's books and records) clearly show that the movement of these monies bears no resemblance to paragraphs 2.1(d) of the Initial Response. Paragraphs 2.1(e), (f), (g) and (h) of the Initial Response are accordingly irrelevant, and paragraph 2.1(k) of the Initial Response on this point is risible.’

51. Counsel suggested that the lengthy and complex explanations put forward on behalf of the Respondents in correspondence were largely smoke and mirrors designed to divert attention away from an essentially simple situation where throughout the Respondents plundered the funds in the Company as their own to be deployed for their benefit and convenience, with virtually no corporate governance. It was also suggested that the length and complexity of the explanations were also laying the ground for challenges on the ground of a failure to make full and frank disclosure on this application.

52. Of course, I was acutely conscious that I do not know what the Respondents would be able to say if they had been given notice of this application, although there must be some doubt as to whether they can make any material addition to what has already been said on their behalf in correspondence. I was also well aware that it might be said that the extensive correspondence itself demonstrated that notice to the Respondents was required. That, however, leads to the considerations which I consider a little later, concerning the interim relief.

53. So far as corporate governance is concerned, Counsel also relied on the evidence from Mr Worsley of the former external accountants to the Company, Hazlewoods. Mr Worsley was engaged to prepare the 2021 accounts and carried out work to prepare the 2022 accounts, but due to Mr Worsley’s concern about the management charge of £500,000 to RDCP Care, it was agreed that Hazlewoods would not complete the assignment and the relevant accounts and corporation tax filings would be made by the internal RDCP team.

54. The principal points made were as follows: i) First, in the accounts to 30 September 2021, the figure for creditors: amounts falling due within one year was £761,031, of which £712,119 is recorded in note 6 as the amounts due to related parties. However, by this date, the first two payments in (in Category A) had been made, totalling £1.29m, yet Hazlewoods did not record £1.29m worth of shareholder loans owed by the Company to Mr Rizvi. ii) Second, Mr Worsley had raised some queries in respect of Mr Rizvi’s director’s loan account during the production of the 2021 accounts. Mr Rizvi agreed that some expenditure described as an expense of the Company was of a personal nature and should be charged against his director’s loan account. Mr Worsley emphasises in his evidence that they did not carry out an audit of the Company’s accounts. iii) Third, it is clear that Hazlewoods distanced themselves from the accounts to 31 December 2022 (a) because they did not complete them and (b) because of their concerns about the management charge of £500,000 to RDCP Care, in circumstances where, at that time, the Company only had three employees. Mr Worsley sets out in his witness statement the significant qualification which was included in Hazlewoods’ auditor’s report on RDCP Care’s accounts for the year ended 31 December 2022. FULL AND FRANK DISCLOSURE

55. I have already covered the specific points raised by the Respondents in favour of characterising the Category A payments as shareholder loans. Mr Davies KC also addressed me on the following more general points.

56. First, that the Respondents would say that they are all the shareholders of the Company and shareholders can ratify breaches of duty. As Mr Davies pointed out, there are four caveats to that: i) First, the act which is sought to ratify must be intra vires the Company. Here, the Liquidators say the Company was not a trading company as such and the irresistible inference from the nature and sheer scale of the Respondents’ personal use of its funds is that they abused the fundamental nature of its separate legal personality, helping themselves to its assets as their own to dip into or move around at their convenience and for their personal benefit/convenience – such actions and conduct were ultra vires the Company and not ratifiable. ii) Second, in any event, there is no evidence that they ever turned their mind to the subject of ratification prior to liquidation – this is fatal to such an argument, relying on Official Receiver v Haq [2025] EWHC 485 (Ch) (‘ Haq ’) at [55]. iii) Third, there are no board meetings or any documents evidencing appropriate corporate governance when setting up a DLA and/or setting its parameters or any rules for its operation. iv) Fourth, ratification is not possible in any event at a time when the Company was doubtfully solvent ( Haq at [52]-[54]) – and it is by no means clear that the Company was, for these purposes, sufficiently solvent when most of the Diversions took place.

57. Second, the Respondents will allege that they operated a DLA properly so-called and that neither Hazlewoods nor anyone else informed them that it was invalid or not being operated properly, although the Liquidators would contend in response that any argument that the Respondents seek to rely on based on s.1157 CA 2006 (statutory defence of acting honestly and reasonably) would fail, see Haq at [88]-[93]. They can also point to authorities where the courts have recognised a high degree of informality in relation to DLAs: see e.g.: Ciro Citterio Menswear Plc v Thakrar [2002] 1 W.L.R. 2217 (Mann J).

58. Mr Davies KC acknowledged there was some force in the Hazlewoods point because directors tend to follow advice from accountants, especially where there is a high degree of informality.

59. In response, the Liquidators would say that Hazlewoods expressed discomfort and never really got to grips with the Company’s situation. In that regard, Hazlewoods resigned due to their inability to verify the Respondents’ dealings with the Company’s property and there is no positive corroborative evidence supporting an allegation that the Respondents received informed professional advice to the effect that the DLAs were properly constituted and/or reflected a running account of authorised debits and credits which were in the interests of the Company. As to permitted degrees of informality, context is everything and the overall abuse here is relying on the Company as a personal cash cow.

60. Furthermore, however informally a director’s loan account is being operated, a reconciliation is required at year end, otherwise no-one can know what the financial position of the Company is. There are no reconciliations which are consistent with the case the Respondents are now running, and I was reminded of the underlined words at the end of the quote from Lord Walker which I cited above.

61. Third, as already mentioned the main dispute concerns the 6 Alleged Capital Injections in Category A. In the very detailed section 2 of the response to the LBAs from RD Capital dated 18 October 2024, the Respondents assert stridently that the Alleged Capital Injections (Category A payments) obviously came from the First Respondent. They assert that, as a result, the Company owes a net sum of £68,980.38 to the First Respondent.

62. However, as explained in paragraphs 11 to 62 of HF’s response dated 20 December 2024, the liquidators’ team have analysed these payments to the Company and concluded, based on contemporaneous records and evidence, that none of them was treated as a capital injection by the First Respondent. In each case, they have identified the source of the payment, which is inconsistent with the Respondents’ case, and noted the lack of any contemporaneous evidence supporting a case of shareholder loans.

63. In sections 1 to 9 of their (even longer) response dated 24 February 2025, various general and specific points are made to the effect that Category A payments were shareholder loans. Their general points are that the burden is on the liquidator to show that the Category A payments were not shareholder loans and also that the liquidators have not shown any entitlement of the Company to any of the Category A payments. As I have already mentioned, the liquidators’ case is that it is emphatically for the First Respondent to demonstrate that he lent these funds to the Company and, if so, on what terms. The question whether the Company was entitled to receive these funds from other entities and, if so, on what terms, is not probative because this would not avail the First Respondent of the personal rights of set off that he asserts.

64. More generally, the liquidators’ case is that the payments out in the other categories were made in breach of fiduciary duty and must be restored because the Respondents were on notice of the facts that gave rise to the breaches and therefore acquired no beneficial interest in the funds. In such circumstances, the existence of a claim in debt is no answer to a proprietary claim - i.e. there can be no set off in respect of the Category A or E payments in any event, see Zemco Ltd v. Jerrom-Pugh [1993] B.C.C. 275 , at p.279B: “what is clear is that there is a general rule that … there can be no set-off for a simple debt against a proprietary claim” (approved on appeal by Hoffmann LJ at p.280E, following Guinness plc v. Saunders [1988] 1 W.L.R. 863 ). THE INTERIM RELIEF SOUGHT

65. The usual American Cyanamid principles apply to the proprietary injunction sought.

66. Counsel cited Derby & Co Ltd v Weldon (No.1) [1990] Ch. 48 at 57 to identify the following well-established requirements for the grant of a worldwide freezing order: i) a good arguable case on the merits; ii) which is justiciable in this jurisdiction; iii) a real risk of dissipation of assets; iv) good reason to believe that the Respondents have assets; and v) it is just and convenient to grant the WFO.

67. On good arguable case, I was also referred to the confirmation in dos Santos v Unitel SA [2024] EWCA Civ 1109 that good arguable case is the merits test for a Freezing Order. My attention was also drawn specifically to [130] in dos Santos : “130….the invasive nature of the relief should be taken into account in considering the other aspects of the test which are required to be fulfilled; in the safeguards built in to the wording of the orders in the form of exceptions; and in the application of the cross-undertaking in damages. I understand the concern that freezing orders should not be granted too readily, and fully endorse the proposition that care should be taken to ensure that they do not operate unfairly. It is always necessary to give anxious scrutiny not only to the second limb of the test, real risk of dissipation, but also to the third, whether it is just and convenient to make the order. Although this has been expressed as the third limb of the test, it is ultimately the whole test expressed in s. 37 Senior Courts Act 1981 , and should be considered in every case, having regard among other things to the effect of granting, or not granting, the order. It may come to the forefront in the context of applications to set aside a freezing order, or to vary it so as to permit particular expenditure or transactional activity, the restraint of which represents the invasive nature of the order. It is by reference to the just and convenient criterion that the apparent strength of the claim may fall again for consideration…”.

68. In my judgment, the Liquidators plainly have a good arguable case. See the summary of their case at [7] above. Furthermore, in the explanation of the Respondents’ position, it was necessary to review the rival contentions and that review reinforces the existence of a good arguable case.

69. The claim is plainly justiciable here because this is an English liquidation and the Liquidators are officers of this court, carrying out statutory functions under the IA 1986 . RISK OF DISSIPATION

70. Counsel reminded me of the following summary of the relevant principles by Bryan J. in Abu Dhabi Commercial Bank PJSC v Shetty & Ors. [2020] EWHC 3423 (Comm) , as follows: i) Dissipation means putting assets out of reach of a judgment, whether by concealment or transfer: Shetty at [90]. ii) What must be shown is a risk of unjustified dissipation (as opposed to transactions in the normal course of business which might have the consequence that sums are not readily available to meet a judgment debt): Shetty at [92]. That does not require the applicant to show that, subjectively, the defendant’s purpose or object is to make themselves judgment-proof – the test is an objective one: Gee on Commercial Injunctions, 7th Ed (2020) at §12-035. iii) It is not sufficient to show merely that the defendant has been guilty of dishonesty. The Court must scrutinise the evidence to see whether the dishonesty in question points to the conclusion that assets may be dissipated: Shetty at [90], Holyoake v Candy [2017] EWCA Civ 92 ; [2017] 3 WLR 1131 at [61]. iv) But the good arguable case may well be a relevant factor: see Shetty at [93]-[95], and AH Baldwin and Sons v Al-Thani [2012] EWHC 3156 (QB) at [31(4)].

71. In addition, Counsel reminded me of paragraph 51 in the Judgment of Haddon-Cave LJ in Lakatamia Shipping v Morimoto [2019] EWCA Civ 2203 : “In my view, in the light of the authorities which I consider in detail below, the correct approach in law should be formulated in the following two propositions: (1) Where the court accepts that there is a good arguable case that a respondent engaged in wrongdoing against the applicant relevant to the issue of dissipation, that holding will point powerfully in favour of a risk of dissipation (2) In such circumstances, it may not be necessary to adduce any significant further evidence in support of a real risk of dissipation; but each case will depend upon its own particular facts and evidence.”

72. Turning to the facts here, the Liquidators relied on the following matters to show there is a real risk of unjustified dissipation. They allege: i) This is a classic case of insiders playing fast and loose with their company’s assets, leaving substantial debts and no property for a liquidator to realise. The very nature of the good arguable case itself gives rise to an inference that there is a risk of dissipation. The Diversions constituted dissipation, and it is reasonable to infer that the Respondents will dispose of assets further if given the opportunity to do so. Of note, the Diversions include payments for luxury villa rentals, private jets, and lavish motor vehicles. ii) Second, the Respondents engaged in evasive conduct to create confusion and distance themselves from the Company on the Date of Presentation by changing the Company’s name - purporting to terminate their appointments as directors of the Company with retroactive effective from 15 January 2023 (some 12.5 months earlier) and purporting to appoint their nanny as a director with retroactive effect from 15 January 2023. The Respondents sought to confuse and frustrate creditors resorting to the insolvency process - by changing company names, arguably to deceive creditors into presenting a winding-up petition against the wrong company. By purporting to resign as directors with retroactive effect, the Respondents abused their positions as directors and misused the Companies’ Register. These are the badges of irresponsibility with assets. iii) Third, to put matters beyond doubt, the Respondents engaged in similar evasive conduct following service of statutory demands by Theodore Management Ltd in respect of RDCP Investments 13 Limited (In Liquidation); and RDCP Investments 20 Limited. iv) Fourth, the Respondents have engaged in further evasive conduct in their responses to the LBAs - providing often misleading and/or wrong information – in this respect I was reminded that, unlike other litigants, the Respondents are under a continuing statutory duty to co-operate with and provide information to the liquidators (see: s.235 IA 1986 ). v) Fifth, there is compelling evidence of the First Respondent’s use of a doctored bank statement to misrepresent the Company’s bank balance in the sum of £77,357,253.97 as opposed to the actual balance of £57,253.97 when asked for proof of funds in the process of an acquisition. Counsel made clear this has not yet been put to the First Respondent, but they still say it stands as strong prima facie evidence of serious fraud. vi) Sixth, the Respondents have a past history of transferring assets abroad, in that: (a) the First Respondent purports to rely heavily on his extensive connections with foreign-based entities (especially in India) and has failed to respond to various reasonable requests for clarification / evidence; and (b) certain companies in the Respondents’ group of companies have altered recently the Person with Significant Control register, to be replaced by RDCTO1, an entity registered in Jersey. vii) Seventh, the Respondents have refused to provide an undertaking not to dissipate assets (requested on 11 October 2024 and refused on 04 November 2024). viii) Eighth, the Respondents have engaged in questionable inter-company charges between group companies, as evidenced in the witness statement of Mr Worsley of Hazlewoods (in which he expressed specific concern in relation to the level of management charges made to RDCP Care (£500,000.00) and whether those charges were commercially justifiable for tax and accounting purposes given the fact that the Company had only three employees) – culminating in resignation of the accountants. ix) Ninth, the Respondents’ matrimonial home – the Property - was subject to a charge registered on 9 February 2024 (a week after the Date of Presentation, and the day after service of the Petition). There is a strong inference that the effect of this was to withdraw equity from the Property to dissipate and/or hide. x) Tenth, on 14 February 2024 (i.e. whilst the Petition was pending, and six days after service of the Petition), the RDCP Group released a notice to certain stakeholders. The brazen nature of this notice was of considerable concern to creditors given that the Company was the ultimate shareholder of several RDCP Group companies. xi) Eleventh, the Respondents are effectively continuing with the trading model undertaken by the Company on funds borrowed from lenders – suggesting a shamelessness associated with asset removal to frustrate judgments. DELAY / THE ‘STABLE DOOR’ POINT

73. Counsel drew my attention to familiar authority on the impact of possible delay in seeking a freezing order and its impact, in turn, on the risk of dissipation, to the following effect: i) Delay by itself is not a reason to refuse an application for a freezing order, nor does it indicate (without more) that there is no risk of dissipation: Antonio Gramsci Shipping Corporation v Recoletos Limited [2011] EWHC 2242 (Comm) at [28]- [29]. This is so even if there is potential widespread dissipation of assets. To the same effect is the decision of Flaux J in Madoff Securities International Ltd v Raven [2011] EWHC 3102 (Comm) ; [2012] 2 All ER (Comm) at [154]-[156]. ii) I was also reminded of my consideration of the relationship between delay and risk of dissipation in Crypto Open Patent Alliance v Wright [2024] EWHC 743 (Ch) at [40] which I do not set out but have well in mind.

74. As to the facts here, the Liquidators made the following points: i) First, the liquidators are strangers to the events in issue and have been proceeding with all deliberate speed. They have experienced considerable difficulty in reconstructing the relevant events when tracing the Company’s history, the causes of its failure and the Diversions. The Respondents are sophisticated operators who inspire initial trust, later to be regretted. ii) Second, an internal forensic exercise on the Respondents’ actions and assets had to be produced and continually updated based on correspondence with the Respondents and new information coming to light which needed to be checked. The liquidators say they needed to be satisfied that they had a reasonable understanding of the Respondents’ resources before committing themselves to a substantial claim. This was compounded by the continuous changes in the shareholdings of companies connected to the Respondents. iii) Third, the liquidators have received lengthy and complex correspondence on behalf of the Respondents, expressing forcefully their innocence of any misconduct. The correspondence had to be taken seriously and analysed and the evidence relating to the presentation of a false bank statement has needed careful handling. iv) Fourth, the Respondents have created a high digital profile for themselves and they display a confidence which the liquidators have come to regard as brazen. Given the complexities of this case, and the evidence required to demonstrate properly the need for a freezing injunction, the liquidators believe that it would have been difficult to bring this application any sooner than they have. v) Fifth, the Respondents had left insufficient realisable assets in the Company to fund a proper investigation. There were no funds available in the Company to settle any disbursements and/or fund any investigation into the conduct of the Company’s management or whether the Company has any assets to realise or claims to bring. The liquidators have not to date realised any assets. As a result, the liquidators have had: a) to seek consent from their firm’s risk committee to bring this application (and the underlying application); b) to instruct solicitors (HF) to act on matters in this liquidation on a contingency basis, and agree the basis of that instruction; c) to instruct leading counsel on a contingency basis, and agree the basis of that instruction; and d) to seek after-the-event insurance to be able to bring this application (and the underlying misfeasance proceedings). vi) Sixth, ultimately, the liquidators also need funding and, for that purpose, to assess risk in circumstances where the books and records are inadequate and the Respondents have been evasive and confusing in their responses to reasonable enquiries of them and their dealings with assets. No creditor or other funding is available to the liquidators to bring this application (and/or the underlying application). ATE insurance was sought and discussions took place over many months and an ATE provider confirmed cover on 23 July 2025.

75. On the issues of delay and stable door, the Liquidators submitted neither was a reason to refuse the WFO: i) They submit this is not a case of delay. The liquidators made the Application as soon as they were able, bearing in mind the facts and matters set out above. ii) The “stable door” point is concerned with a situation where a party is on notice of potential legal proceedings and has not dissipated its assets – thus giving rise to an inference that it will not do so. But the point cannot sensibly apply where a party has dissipated its assets, as the Respondents have. iii) Whilst it is possible that the proverbial horse has bolted, that is far from certain and it may well still be possible to preserve some, if not all, of the relevant assets.

76. Overall, I was entirely satisfied that the length of time that has passed since the Liquidators were appointed did not in any way disentitle them to the interim relief sought. It was clear to me that it has been necessary to carry out a substantial amount of work in order to investigate matters, put allegations to the Respondents and formulate this claim and this application.

77. I was also entirely satisfied there remains a real risk of dissipation even if the Respondents have already taken steps to attempt to put some assets beyond reach. In this regard, I had in mind that the correspondence with the Respondents ended with their response dated 24 February 2025, more than 5 months ago. I thought it safe to assume that Mr Rizvi is a sophisticated individual: he will have been aware that no funds were left in the Company to fund litigation, but he will have been aware of the possibility that the Liquidators might be able to raise funds for that purpose. He is likely to have taken some steps to put some assets beyond the reach of the Liquidators but probably not all since he continues to be resident in the UK. Overall, I concluded there was purpose in the interim relief sought, even if the Liquidators have further fights on their hands to recover the sums claimed. ASSETS

78. The evidence showed that the Respondents have assets within and outside the jurisdiction. As to the former: i) A freehold property in Leatherhead (the “ Property ”), of which the First Respondent is the sole registered proprietor. The liquidators are unaware whether, as between the Respondents, the Second Respondent has any beneficial interest in the Property (they are married). The Property was purchased for £4,150,00 on 30 August 2018. It is subject a registered charge dated 05 February 2024 in favor of Credit Suisse (UK) Limited. A neighboring property understood to be similar was recently placed on the market for £6,500,000.00. ii) The Respondents each have a 50% interest in RD Capital Tactical Opportunities 1 Limited (“ RDCTO1 ”). The liquidators have identified that a substantial number of shares in UK companies are now owned by the Jersey entity referred to above, RDCTO1. iii) The following high-end motor vehicles have been identified as being in the First Respondent’s possession or control: (i) Bentley Bentayga (Reg No: S7 XRD); (ii) Lamborghini Urus (Reg No: X1 XRD / Chassis No: LA 13353); (iii) Ferrari Roma (Reg No: F1 XRD); (iv) Mercedes G Wagon (Reg No: G6 XRD); and (v) Mercedes G63 AMG (Reg No: FX22 MMF / Chassis No: X434484). iv) The Respondents’ personal bank account held at NatWest.

79. As for the Respondents’ assets outside the jurisdiction, they have at least the following: i) The Second Respondent has an interest in a number of companies in Aix-en-Provence, Franc: (i) Societe D’etude De Realisation et Fournitures Industrielles SAS (Siren 422 169 300), where she is listed as the Director-General; (ii) Elisium Sarl (Siren 804 219 475); (iii) Horizon (817 486 434); and (iv) she may also have an interest in Irox SCI (Siren 481 539 856). ii) The Respondents are also understood each to have a 50% interest in Villa Horizon Real Estate SL in Spain, under Registro Mercantil B13757554.

80. The Respondents were each subject to bankruptcy petitions presented to the County Court at Kingston-upon-Thames as follows: (a) First Respondent: 65 of 2024 presented on 25 October 2024; and (b) Second Respondent: 75 of 2024 presented on 30 October 2024. The liquidators have no further information in respect of these petitions, save it is understood that the petitioner was Mitsubishi HC Capital UK plc and they have not been made subject to bankruptcy orders; no entries appear on the individual insolvency register for either of the Respondents. JUST AND CONVENIENT

81. On this requirement, the Liquidators summarised their position as follows.

82. The Respondents owed positive statutory and fiduciary duties to safeguard the Company’s assets and not to place themselves in a position where their duties to the Company conflicted with their personal interests. In fact, the Company has been stripped of its assets which have been applied to or for the Respondents, leaving nothing for the creditors. It is noteworthy in this respect that the Respondents did not cause the Company to dispute Theodore’s statutory demand or its winding-up petition. Instead, their response to the demand was to attempt to create the false appearance at Companies House that they had ceased to be directors over a year earlier and that their children’s nanny had been the individual subject to all the duties and responsibilities as sole director of the Company. In a very real sense, the Respondents are culpably responsible for stripping the Company of any assets even to fund an investigation into their conduct. In all the circumstances, it is reasonable to infer that this was deliberate – in an effort to stifle a meaningful liquidation, including any proper investigation of their conduct.

83. It appears to the liquidators that the Respondents have been at the centre of a web of financial misconduct. There is a real risk of dissipation of assets so that any judgment against the Respondents could go unsatisfied. In such circumstances, the creditors of the Company would be unjustly prejudiced, especially in circumstances where the Respondents have abused the privileges of limited liability in the manner described above. DISCLOSURE ORDER

84. The Liquidators seek a disclosure order against both Respondents to give teeth to the injunctive relief.

85. Counsel cited the discussion in PSJC Commercial Bank Privatbank v Kolomoisky & Ors [2018] EWHC 482 (Ch) of the relevant principles at [33]: i) The purpose of the asset disclosure order is ancillary to the freezing order – i.e. to “give[s] the teeth which are critical to a freezing order”. ii) An asset disclosure order should only be made for the purpose of policing the injunction, and not for the purpose of enabling a claimant to investigate issues in the substantive claim. iii) The fact that information may be confidential is not a reason to withhold the disclosure.

86. Counsel also cited a passage from Gee (Commercial Injunctions 7 th Edn, at 23-006) which suggests that the legitimate purposes of such an order include the following: “It enables the claimant to consider whether further steps should be taken to preserve or safeguard the assets which are within the scope of the injunction, and whether there are other assets which should be made the subject of an application for freezing relief, whether in England or abroad, or brought specifically within the terms of the existing relief, for example, assets recently acquired or receivables.” CROSS-UNDERTAKING IN DAMAGES

87. The final topic for consideration is the cross-undertaking in damages. Counsel accepted that the starting point, even for liquidators with no personal gain in sight, is that an unlimited undertaking in damages should be provided (see: JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139 ; [2016] 1 WLR (at [68] to [84] and Hunt v Ubhi [2023] EWCA Civ 417 ; 2023 Bus LR 1827 (at [29]) In the relevant parts of [29], Newey LJ summarised the applicable principles as follows: “iv) It may also be appropriate to depart from the "default position" where the applicant has no personal interest in the litigation and is bringing the claim on behalf of others (paragraph 68). That being so, the fact that the claimant is a liquidator of an insolvent company is a highly relevant factor (paragraph 69); v) Even so, the mere fact that litigation is being brought by a liquidator of an insolvent company does not compel the conclusion that the cross-undertaking should be capped (paragraph 69). The burden lies on the applicant who says that he should not be required to give an unlimited cross-undertaking to demonstrate why that is so (paragraph 85); vi) In that context, it can be relevant to consider whether one or more creditors could be expected to indemnify the applicant. Where there are numerous small creditors, it may be impractical to obtain an indemnity, but the position may be different where there are larger creditors (paragraph 81) and, if the liquidator is being funded by a creditor, that may put a "different complexion" on it. ….. In Pugachev itself, Rose J had been entitled to conclude that the liquidator had failed to discharge the burden on it given "the lack of evidence about what efforts the [liquidator] had made to persuade substantial creditors, for whose benefit the recoveries would enure, to back the cross-undertaking" (paragraph 85); vii) The availability of insurance can also be of significance (paragraph 68 and In re DPR Futures Ltd [1989] 1 WLR 778 , at 785); viii) A defendant need not show that the freezing order is likely to cause him a loss before a cross-undertaking of unlimited amount is required (paragraph 78). "It is … fairness rather than likelihood of loss that leads to the requirement of a cross-undertaking" (paragraph 77); and ix) Whether a cross-undertaking should be of unlimited amount is a separate question from whether an applicant should fortify the cross-undertaking by the provision of security.”

88. With those principles in mind, Counsel submitted that the nature and extent of any undertaking in damages required from an insolvency office-holder is intensely fact-sensitive, especially in circumstances where, as here, the Liquidators say that the Respondents are themselves prima facie culpably responsible for the lack of funds in the liquidation estate and the claims against them are, the Liquidators contend, particularly strong. I agree that there is a wide spectrum of circumstances. At one end there is a director who simply absconds with small investors’ funds on the eve of liquidation – in such a case it is foreseeable that a court might dispense with a need for a cross-undertaking. At the other end, the creditor victims might be large financial institutions who have lost many millions and who can be expected to fund the liquidator.

89. In this case, there does not appear to have been any recognisable corporate governance of the Company as between directors who were husband and wife. They dipped into the Company’s funds as a matter of course and at will, acting in the manner of individuals using their personal bank accounts, leaving no funds for a liquidator. In the absence of any funds and in circumstances where Investec have refused to fund – objectively, it can be said that they have already suffered enough - the liquidators have sought and obtained “cross-undertaking in damages insurance”, (“ CUDI ”), an insurance product which ensures that the liquidators have access to sums within the policy limit to satisfy any call upon the cross-undertaking in damages.

90. The CUDI insurance is capped in the sum of £200,000.00. Cover is in respect of “Cross Undertaking in Damages” where the court has ordered <the insured> to pay them. “Cross Undertaking in Damages” is defined as any opponents damages and costs arising out of an order by the Court to compensate the Opponent as a result of the Order for a Freezing Injunction and Other Associated Relief against the Opponent.

91. The Liquidators’ position is that they have initiated the Application (and the underlying misfeasance proceedings) in the interests of the Company’s creditors in pursuit of their duties and statutory functions as liquidators of the Company. They have no skin in the game personally. Accordingly, the Liquidators submitted that it is appropriate to seek to limit the sums upon which the cross-undertaking in damages is based to the indemnity from the CUDI policy and any recoveries in the liquidation of the Company.

92. On the information before me, I consider a cap on the cross-undertaking of £200,000 provides sufficient protection for the Respondents. This, in common with all other aspects of the Order, can be reviewed at the Return Date or earlier if the Respondents seek to apply. CONCLUSIONS

93. In the circumstances of this case and for the reasons summarised above, I agreed that it was just and convenient to grant a worldwide freezing order in the sum of £5,159,709.28 (a sum which includes the principal sum claimed and interest). It was also appropriate to grant the proprietary injunction sought over the sums received from the Company into the bank account of the Respondents, and over any asset purchased with or representing the proceeds of those sums. There is plainly a serious issue to be tried and damages are not an adequate remedy for the Liquidators. Furthermore, to the extent that the injunction might cause any damage to the Respondents, I was satisfied there was adequate protection for them in the limited cross-undertaking proffered. I also concluded that both injunctions should be reinforced with an order for provision of information as to the assets exceeding £5,000 in value held by either of the Respondents worldwide.

94. Finally, for reasons which I need not relate, Counsel indicated that it might take some time to effect service of the Order on the Respondents. For this reason I have directed that this Judgment is not to be published until after the Respondents have had notice of the Order, even though I was not asked to sit in private to hear the Application.