UK court halts transfer of shares at SMCP

A significant development has occurred in the SMCP case, the company overseeing Sandro, Maje, Claudie Pierlot and Fursac. The British High Court has invalidated the sale of a 15.9 percent stake in the French ready-to-wear company, initially sold to Dynamic Treasure Group, an entity linked to the founder of Shandong Ruyi, the former owner of SMCP.

This judicial decision follows the bankruptcy of Shandong Ruyi in 2021. A group of creditors, united under the banner of the trustee Glas, had recovered nearly 30 percent of SMCP’s capital with the intention of selling their shares.

However, the situation became complicated due to the fact that Shandong Ruyi, through its subsidiary European TopSoho, retained 8 percent of SMCP’s shares, while the remaining 15.9 percent had been transferred to Dynamic Treasure Group.

Creditors oppose the sale

The creditors, unhappy with this transaction, challenged the sale before the British High Court, arguing that Dynamic Treasure Group was merely a front entity designed to mask Shandong Ruyi’s continued control over SMCP.

The Court ruled in their favour, finding that the sale was not in accordance with corporate governance rules and constituted an attempt to circumvent Shandong Ruyi’s obligations to its creditors.

Consequences of the decision

This decision has significant implications for the future of SMCP and could have a significant impact on the company’s strategy and ownership structure. The company will now have to determine how to manage this 15.9 percent stake, which is now in limbo.

It is possible that the shares will be put back up for sale, or that SMCP will proceed with a buyback. The situation could also lead to new negotiations between the creditors and Shandong Ruyi.

This judicial decision adds an extra layer of complexity to the already fragile situation of SMCP. The company, which is seeking to restructure after the bankruptcy of Shandong Ruyi, now faces a new legal obstacle.