In Wood & Adam v Khumalo and ors [2026] JRC 202, the Royal Court of Jersey granted summary judgment against two former directors for a £77 million asset-stripping scheme executed prior to liquidation.
Case Details
- Court & Date: Royal Court of Jersey (Samedi), 30 July 2026.
- Parties: Andrew Wood and Alexander Adam (Liquidators of Gold & General Limited) v. Mzilikazi Khumalo (D1), Tulani Sikwila (D2), and Three Rivers PTC Ltd (D3).
- Primary Claims: Transaction at an undervalue (Article 176) and breach of directors' duties (Article 74) under the Companies (Jersey) Law 1991.
Key Facts & Misconduct
- Asset Misappropriation: In October 2021, directors Khumalo and Sikwila procured the transfer of G&G’s sole major asset—an 84% shareholding in Metallon Corporation Ltd—directly to Khumalo personally for zero consideration.
- Insolvency Status: At the time of transfer, G&G was cash-flow insolvent following a default on an overdue $11.25 million balance owed to a creditor.
- Subsequent Siphoning: Khumalo later transferred 74% of the Metallon shares to Three Rivers PTC Ltd, trustee of a family trust benefiting Khumalo and his family.
- Non-Participation: Defendants failed to file Answers or appear despite valid service via the Hague Convention and court-ordered substituted service.
Court Findings
- Application of Summary Judgment: Following English authority (Duferco SA), the court held that summary judgment on the merits—rather than default judgment—was appropriate against non-participating defendants to facilitate foreign enforcement in Switzerland and South Africa.
- Article 176 Liability: Khumalo failed to prove G&G was solvent or that the transfer was in good faith, confirming an actionable transaction at an undervalue.
- Article 74 Liability: Khumalo breached his duty to act honestly and in good faith. Sikwila was found liable under Article 74(1)(b) for either actively facilitating the transfer or being "asleep at the wheel" and failing to exercise reasonable care.
Quantum & Remedy
- Valuation Base: The court valued G&G's 84% stake as of the transfer date (October 2021) at £77,041,670, derived from net asset values in administration filings.
- No Minority Discount: A minority discount was rejected because an 84% stake confers total corporate control.
- Award: Khumalo and Sikwila were ordered jointly and severally liable to pay G&G £77,041,670 plus court-rate interest.
Liquidators successfully challenged undervalue share transfers to a foreign trust, with the Court drawing adverse inferences from missing corporate records and endorsing the English Sequana creditor-duty principle. Read South Square's Jersey Summary Judgment Analysis.
Jersey: £77m Director Liability & Domestic Administration Regime Active