ArawakX full wind-up sealed without a fight

• Crowd-fund principals ‘consent’ to liqudation

•Commission’s attorney: Outcome ‘inevitable’

• Wind-up ‘overwhelmingly’ in public’s interest


Tribune Business Editor



Michael Scott, QC.


D’arcy Rahming Sr


D'Arcy Rahming Jr




Sir Ian Winder.

THE Bahamas’ first-ever crowd funding platform’s fate was yesterday sealed without a fight after its former principals effectively consented to its liquidation amid claims of a near-$4m insolvency.

Michael Scott KC, who spearheaded the Securities Commission’s legal bid to have ArawakX and its parent, MDollaz Ltd, wound-up under the Supreme Court’s supervision confirmed to Tribune Business that full liquidation will proceed after no resistance was offered by D’Arcy Rahming and his son, D’Arcy Jr, at a relatively short morning hearing before Sir Ian Winder, the Chief Justice.

Describing the outcome as “inevitable” in his opinion, Mr Scott told this newspaper: “It’s absolutely overwhelmingly in the public interest this thing be wound-up.” To support his position, he not only cited ArawakX’s insolvency but also the alleged commingling and use of “over $1m of fiduciary cash” to pay the company’s expenses and purported “criminal violation” as a result of its unauthorised public offering.

“In my respectful conclusion and opinion, this Order was inevitable on at least four grounds,” Mr Scott said of the winding-up outcome. “One, the obvious insolvency. Two, the criminal infraction. Three, the regulatory infractions and, four - and you can throw this in with the criminal infraction - the commingling of funds and misuse of fiduciary funds for operating purposes.

“In my view, I think the result was inevitable, and all they [ArawakX’s principals] saved themselves was a two-day contested hearing. Similarly, I think the result with MDollaz technology will be inevitable and forthcoming, as it’s clear from the evidence and the joint provisional liquidators’ report that MDollaz Technology was operating as a clone.... of MDollaz Ltd.

“MDollaz Technology had no corporate or business purpose outside of the [crowd-funding] platform and their operation of it. It’s as simple as that.” Ed Rahming, the Intelisys (Bahamas) principal, and Cheryl Simms, the Kikivarakis and Company accountant, in their capacities as ArawakX’s joint provisional liquidators have described MDollaz Technology as an affiliate not regulated by the Securities Commission.

“The joint provisional liquidators found that an affiliated company, Mdollaz Technology Ltd, was used in the operation of the company (MDollazLtd/ ArawakX) for over two years,” they alleged in their February 22, 2024, report to the Supreme Court.

“We were informed that due to delays experienced in opening the bank accounts at Bank of The Bahamas in the name of MDollaz Ltd, the company decided to have MDollaz Technology Ltd open bank accounts at Bank of The Bahamas and use those bank accounts to conduct the business of the company.

“We understand that MDollazLtd was awaiting an operating licence from the Securities Commission in order to open the bank account and MDollaz Technology Ltd, which is not regulated by the Securities Commission, did not have this requirement.”

Due to its role in the ArawakX structure, Tribune Business understands that MDollaz Technology is also likely to be placed into court-supervised liquidation under Mr Rahming and Ms Simms’ care although this has yet to be determined.

And the Supreme Court order, which will upgrade the liquidators from provisional to official, now has to be drawn-up and perfected following consultations between all relevant parties prior to it being signed by the Chief Justice. Khalil Parker KC, the Bahamas Bar Association’s president, represented ArawakX’s principals who are understood to have been absent from yesterday’s hearing.

D’Arcy Rahming senior, who headed ArawakX and is a former Bahamas International Securities Exchange (BISX) chief operating officer, did no respond to Tribune Business calls and messages seeking comment before press time last night.

However, the Rahmings had previously vehemently denied, and rejected, all concerns and allegations of wrongdoing in relation to how MDollaz and ArawakX were operated and managed. D’Arcy senior, in a September 27, 2023, affidavit filed with the Supreme Court, asserted: “For the avoidance of doubt, the respondent rejects that it is insolvent in the sum of at least $2.4m.

“The respondent is not the subject of any financial claims or demands as at the date hereof. The respondent also denies that it has committed breaches under the ‘Securities Industries Act that warrant criminal penalties’.” Christina Rolle, the Securities Commission’s executive director, also declined to comment on the outcome when contacted by Tribune Business.

Mr Rahming and Ms Simms, in their February 22, 2024, report to the Supreme Court revealed that ArawakX’s insolvency had almost doubled from the Securities Commission’s initial $2m estimate after they wrote-off more than $1m in assets listed on its balance sheet.

This left the platform and its parent, MDollaz Ltd, with just $508,665 in assets to cover $4.474m in total liabilities, thereby producing a $3.965m deficit with the provisional liquidator duo warning this gap is only likely to increase since “significant sums [are] owed to third parties”.

They said it was also impossible to cure MDollaz/ ArawakX’s “criminal violation” of the Securities Industry Act as a result of the unauthorised public offering that persuaded 134 investors to inject capital into the crowd-funding platform, while alleging there was “substantial commingling” of funds belonging to ArawakX itself and those entrusted to it by investors in the share issues it facilitated.

The latter should have been held separately by the crowd-fund platform, which would have been acting in a trustee or fiduciary capacity, but Mr Rahming and Ms Simms are alleging that “over $1m of fiduciary cash was used on company expenses”.

Their first Supreme Court report identified no fewer than 16 purported breaches of the Securities Industry Act, its accompanying regulations and rules by ArawakX. The alleged violations, according to the provisional liquidators, ranged from failing to safeguard, segregate and maintain proper controls to secure client funds; not obtaining Securities Commission approval for Board and corporate governance changes; and not paying distributions to investors on time or returning investor monies from failed crowdfund issues.

However, the most serious allegation concerns MDollaz/ArawakX’s “public offering” which was held even though the company’s own Memorandum of Association stipulated that “the company shall be a private company and, accordingly no shares nor any class of shares of the company shall be offered to the public for subscription”.

“The joint provisional liquidators have found that the company is insolvent, having a net deficit of $3.965m with significant sums owed to third parties,” Mr Rahming and Ms Simms told the Supreme Court. “This amount is likely to increase after further investigation by the joint provisional liquidators and a creditor adjudication process.

“It is our view that the company has no viable prospects of continuing as a going concern.” Describing the findings from their investigation as “very serious”, the duo said they had chosen to “highlight two”, and added: “We found the commingling of company cash with fiduciary cash as a matter of course at the company. We found that over $1m of fiduciary cash was expended on company operational expenses.

“The Company conducted a ‘public offering’ without seeking the approval of the Securities Commission of The Bahamas. This finding is irremediable and consists of multiple criminal infractions which will be reported to the Royal Bahamas Police Force.”


John 3 months, 1 week ago

and the roof came tumbling down in the house of cards. Too much infighting and distrust and maybe betrayal Even among the principals that made the product unattractive, despite the vast opportunity that was available to empower and benefit investors

ThisIsOurs 3 months, 1 week ago

This is mystifying. If the Securities Commission had never given ArawakX the approval to open bank accounts followed by ArawakX using MDollarz to open bank accounts as MDollarz had no like requirement to get permission from the Securities permission to do so, how was all this done with the Securities Commission not being aware? Because they were very public about all of their customer seeking activity.

"The Company conducted a ‘public offering’ without seeking the approval of the Securities Commission of The Bahamas" But how is this possible?? Had the SCB gone on sabbatical?

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