Step down subsidiary company debts
I am owed money from a UK based Sports Gambling Company that collapsed in early 2014. The UK Gambling Company is a step down subsidiary of a large Indian PLC listed on the Bombay Stock Exchange. The Managing Director and CEO of the Indian PLC were also directors of the UK company. The Indian PLC audited accounts for year to 31/3/14 show the step down subsidiary listed and the Indian company having 60.40% voting rights.
An email I received from the UK Gambling Company last year shortly after they shut down contained this wording "the preference of the Directors of the (UK Gambling) company was to work with the shareholders to increase the capital within the company that would alleviate the problem and pay out the existing claims. The directors initially hoped that the parent (Indian) company would reach agreement amongst the shareholders for this to occur, but unfortunately agreement could not be reached with the majority shareholder."
The UK gambling company initially blamed IT issues for customer withdrawal requests not taking place but I believe there is a case for wrongful trading as the gambling company were offering bonuses of 100% of a customer deposit up to £500, paying out withdrawals when funds were received so there was a huge cash flow issue.
On the basis the Indian PLC was the parent company with majority ownership, and the directors have a duty to prevent insolvent trading, should they have paid off the debts of the UK step down subsidiary rather than simply walking away from their obligations?
As the company are a Indian PLC would you advise I contact them directly for a response as to why they did not pay off their creditors, go to a solicitor or is there an investigatory body in India that would look into this?
Asked 10 years ago in Business Law
