Bloxham Stockbrokers in liquidation was yesterday given permission by the High Court to legally challenge a decision to revoke Bloxham’s membership of the Irish Stock Exchange.
Bloxham, a limited partnership, was ordered to cease trading by the Central Bank last summer after it was revealed it was undercapitalised and the partners applied to have it wound up, saying they saw no prospect of an improvement in its trading position.
The High Court later confirmed the appointment of Kieran Wallace of accountancy firm KPMG as liquidator to the stockbrokers. The firm’s largest creditors included National Irish Bank, owed €8.5m, and the Revenue Commissioners, owed €2.3m.
The firm held membership of the Irish and London stock exchanges. Based in Dublin’s International Financial Services Centre, it also had offices in Cork and Limerick and more than 17,000 clients.
In the Commercial Court yesterday, Mr Justice Peter Kelly granted Bloxham in liquidation leave to bring a judicial review of a decision in December last year to revoke or terminate its membership.
It is claimed the Irish Stock Exchange Ltd, through its head of regulation, Daryl Byrne, failed to take into account relevant considerations in determining whether or not to exercise the discretionary power of revocation of Bloxham’s membership.
It is further claimed that Mr Byrne acted in an unreasonable and disproportionate manner in purporting to revoke Bloxham’s membership without having any or any sufficient regard to the financial impact on Bloxham of being prevented from participating in the surplus that would arise in the proposed re-organisation of the Irish Stock Exchange.
Bloxham also claims it was not given the right to be heard and make representations in relation to the decision, notwithstanding that the impact of the decision was financially extremely significant to Bloxham.
The Irish Stock Exchange also allegedly failed in its duty to provide any adequate or sufficient reasons for its decision to revoke or terminate Bloxham’s membership of the exchange.
The case will come before the Commercial Court again next Thursday when Mr Justice Peter Kelly will hear an application to have the case admitted to the commercial court list.
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