c) Manu is the Finance Director of Womengold Ltd, an insolvent company whose creditors have applied to the court to appoint a receiver. Manu wants to be appointed as a receiver since he is very much versed with the details of the company and feels better placed to deal with the creditors than any other person. Alternatively, he proposes that his consultancy company, Adom Consult, should be appointed as a receiver.

Required: i) Explain whether or not Manu or Adom Consult can be appointed as a receiver. (6 marks)

ii) State FOUR (4) reasons that prohibit a person from being appointed as a receiver. (4 marks)

Answer: i) Manu, as a director or former director, along with all other directors, cannot be appointed receiver for the company. The same applies to an auditor of the company. Their previous detailed knowledge of the company is immaterial here, and they must hand over the books, documents, etc., to any court-appointed receiver.

Manu’s consultancy company, Adom Consult, or any corporate body is also barred from being appointed as a receiver. (6 marks)