Ann: Supreme Court Winding Up Order on GoConnectAustralia Pty Ltd, page-13

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darcy7

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24/10/14

13:08

Post #: 14176659
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Originally posted by jefferies2 ↑

Further to my previous post, I now think the announcement is smoke and mirrors.

I don't know why the debt and the insolvency, were incurred by GoConnect Australia Pty Ltd - a 100% subsidiary of Goconnect Ltd - and not by the holding company GoConnect Ltd (which had its trading halt lifted today). That trading arrangement doesn't really matter, I suppose.

What does matter is GCN's statement in today's announcement that: "After due investigation GoConnect Ltd is satisfied that there is no material impact on the company."

That, I assume, is another way of saying that the parent company is not responsible for the debts of its totally owned subsidiary.

IMO you don't have to be a lawyer to say that the liquidator may not see things that way.

Consider the legal discussion at http://tinyurl.com/mr6p6kg and particularly the conclusion on page 271: "The more comprehensive the co-ordination, the more likely that the holding company will be liable for the debts of the subsidiary [my emphasis]."

Of course there is nothing wrong with a subsidiary incurring debts, unless they are insolvent. My point is that I find it difficult to believe that the directors of the holding company (GCN) did not know of the debts being incurred by its subsidiary. Indeed I would have thought that there was close to 100% coordination while this happened.

So I don't see that GCN is in any way out of the woods.

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Both Companies have the same Director ,but I understand that the employees were employed by
the Subsidiary Company and not by GCN ,so Mr Li must think that if they do not get paid it should have no effect on the on the listed entity,maybe I do not get it .
,Also SiS the so called underwriter could not come up with a
Solvency Report when requested by the Court a few weeks ago and yet they are the Creditors for GCN
Maybe it will all be explained in the next weeks quarterly..

GCN Price at posting: 0.9¢ Sentiment: None Disclosure: Not Held
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