A Bermudian-registered investment fund has been ordered by the Supreme Court to wind up because the island’s financial regulator found it had breached several regulations.
The Bermuda Monetary Authority petitioned the Supreme Court to wind up Cumulus Eastern European Property Fund Ltd, pursuant to section 36(1)(b) of the Investment Funds Act 2006 (the IFA) and the provisions of the Companies Act 1981.
The BMA said it no longer had confidence in Cumulus’s ability to manage its own affairs to the benefit of its investors.
Keiran Hutchison and Roy Bailey of EY Bermuda Ltd were appointed as joint provisional liquidators of Cumulus, after the court made the winding-up order last month.
The BMA said Cumulus was in breach of the IFA and the Fund Rules 2007.
In particular, said the regulator, there was a failure to prepare annual audited financial statements for the past five years.
“The company has provided audited financial statements for the year ended December 31, 2013, which statements are highly qualified and have not yet been signed off by the company or the auditors,” the BMA stated.
The regulator added that Cumulus had failed to meet the requirement to have an investment manager with day-to-day control over the management of the property of the company.
“The Authority viewed the above breaches as serious because of their extent and duration, and no longer had confidence in Cumulus’s ability to manage its affairs to the benefit of its investors,” the BMA stated.
“The Authority’s actions highlight the importance of its role in protecting the reputation of the jurisdiction and protecting the interests of investors.”