Moore Stephens illegality defence rejected
Mr Justice Langley shoots down Moore Stephens' reasoning that the case should be thrown out because Stone & Rolls' suit was founded on an illegal act
Mr Justice Langley shoots down Moore Stephens' reasoning that the case should be thrown out because Stone & Rolls' suit was founded on an illegal act
Moore Stephens’ attempt to get Stone & Rolls’
ground-breaking
law suit thrown out failed because the presiding judge did not agree
that Stone & Rolls case was founded upon an illegal act.
The firm said that the fraud at the company had been committed by an
individual. Since the individual was the company to all intents and purposes,
the claim from the company effectively meant founding a claim on an illegal act.
Mr Justice Langley believed that the case had merit because it was being
brought by the liquidators Benedict Mackenzie on behalf of the injured creditors
of S&R, however.
The case centres on the fact that Stone & Rolls boss Zvonko Stojevic
had colluded with Austrian company BCL to create fake commodity sales, allowed S
&R to draw $90m (£46m) funds from Komercni Banka, a Czech banking
institution.
These funds were passed through S&R’s accounts on their way to BCL and
the claimants believe that this should have been discovered by its auditors.
S&R acccused partners David Anstis and Chris Chasty of being negligent in
their audits of Stone & Rolls between 1996 and 1998. The fraud eventually
led to S&R going into liquidation after it was forced to pay out $94.5m to
KB in 2002.
In the judge’s opinion the claim, which comprised of 399 paragraphs, 3
schedules and 4 annexes, was ‘daunting’ but he believed that the prosecution had
done enough to convince him that the case should go ahead.
Court papers show that the compound interest claim that Moore
Stephens managed to have struck out amounted to $80m.
The case is ground-breaking because it uses litigation funding, being funded
by a third party, IM Litigation Funding.
Further Reading;
Breaking
News: Moore Stephens claim gets go-ahead