Loss of substratum and just-and-equitable winding up applied where a banking company's core business had ceased.

A company formed primarily as a banking concern was found to have lost its substratum after its banking business ceased following regulatory intervention, and a later conversion attempt did not revive that business. Although its memorandum contained wider objects, the banking business remained the paramount object in light of its structure, name and articles. The company's funds were substantially tied up in concerns controlled by the dominant shareholder group, recoveries were negligible, and minority shareholders derived no practical benefit. In those circumstances, continued existence would only serve the controlling group, and the availability of other remedies did not make winding up inappropriate. The court concluded that the substratum had disappeared and that it was just and equitable to wind up the company.

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Issues: Whether the company was liable to be wound up on the grounds that its substratum had disappeared and that it was just and equitable to wind it up.

Analysis: The company had been formed primarily as a banking concern, and its banking business had ceased after regulatory intervention and the subsequent conversion attempt had not restored that business. Although the memorandum contained other powers and objects, the banking business remained the paramount object in the context of the company's structure, name, and articles. The company's funds had been substantially locked in concerns controlled by the dominant shareholder group, recoveries were negligible, and the minority shareholders were receiving no benefit. In these circumstances, continued existence of the company would only serve the interests of the controlling group, while the minority remained without practical relief. The availability of other remedies did not make winding up unreasonable on these facts.

Conclusion: The company's substratum had disappeared and it was just and equitable to wind it up. The petition succeeded.

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