High Court confirms appointment of liquidators to prepaid card firm

Despite its position, the company, which remains solvent, expects to be in a position to pay all of what it owes its creditors

The High Court has confirmed the appointment of joint liquidators to a financial firm that issued prepaid cards for purchasing goods and services.

Last month, insolvency practitioners Kieran Wallace and Andrew O’Leary, of Interpath Advisory Ireland, were appointed as provisional liquidators to PFS Card Services Ireland Ltd.

On Tuesday, Mr Justice Liam Kennedy confirmed their appointment as official liquidators to the company, which is owned by the Australian financial technology group EML.

There were no objections to the application, but two French-based creditors raised concerns about aspects of the winding-up.


Represented by Ross Gorman BL, Creacard SA, which is owed €14 million, and Klopercom Limited, trading as Veritas, which claims it is owed €1 million, raised concerns that their customers were unable to activate and use funds on cards created by the company in liquidation.

Counsel said Creacard had been getting 20,000 calls a day from customers who could not redeem their money after buying the cards.

Counsel said Creacard was also concerned about the sale of certain intellectual property of the company in liquidation to its shareholder Prepaid Financial Services (Ireland Limited) which is also part of the EML group.

That sale of the key asset, a secure online portal that allows business clients to manage and configure programmes with the company, took place two days before the company was placed into liquidation, counsel said.

His clients were not objecting to the liquidators’ appointments and accepted the liquidators had addressed some of their concerns.

In reply, Lyndon MacCann SC, for the liquidators, said his clients had been made aware of the creditors’ concerns and were taking steps to address the issues raised.

The company, represented by Kelley Smith SC, with John Lavelle BL, sought the liquidators’ appointments because its business model was no longer commercially viable or sustainable, was loss-making and bound to fail.

Despite its position, the company, which remains solvent, expects to be in a position to pay all of what it owes its creditors. It holds €516 million of segregated funds for its customers with 2.4 million prepaid cards in issue.

Its operating revenues had been falling and its costs were rising. It lost €7.3 million in 2022, an estimated €15 million in 2023 and was expected to continue making losses.

The company, which was acquired by EML in 2020, required substantial investment to survive. The EML group, which had put significant funds into the firm, was not prepared to invest further in the company.

The company employs 144 people, 112 of whom are based at the company’s facilities at Bray, Co Wicklow, and Trim, Co Meath. The rest of the employees are based at the firm’s branches in Spain and France.

The company was authorised to operate as an electronic money institution by the Central Bank of Ireland. There has been extensive engagement between the company and the bank since 2020.

The bank opened an investigation into the firm’s business after it raised concerns about its alleged failings in respect to anti-money laundering controls and governance arrangements. The Central Bank also imposed certain regulatory directions including restrictions on its ability to accept payments from customers.

The company put a plan in place to address the issues raised and had hoped it would be completed before the end of 2023. However, the bank expressed its dissatisfaction with the firm’s plan and indicated it was considering issuing a direction that would limit the firm’s ability to grow.

Following those compliance issues, the company changed its board of directors and its parent began a strategic review of the firm’s operations.

The company’s board decided the best option for all of the relevant stakeholders, including the employees and customers, was to put the company into liquidation via the courts because it was just and equitable.

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