Choice Technology directors and other interested parties are being investigated to determine if they were responsible for its failure.
The company, which was put into provisional liquidation in 2008, finally closed its doors last year when the liquidators could not finalise an agreement to bail it out.
Square One applied for Choice's liquidation through subsidiary Structured Infrastructure Solutions, claiming Choice owed it money.
It is understood the dispute between the companies arose from an attempt by Square One to take over a 49% stake of Choice, held by the National Empowerment Fund, as well as the remainder of the interest, held by the Choice Group.
Wrongful trade
Liquidator Deon Botha, of Corporate Liquidators, says closed hearings are being held to determine whether Choice's directors - or other interested parties involved in running the company - traded negligently.
He explains that the investigation is looking as far back as 2003. If the investigation determined that directors, or other parties, traded while the company was in financial difficulty, they could be held responsible for Choice's debts, says Botha.
Choice owed about R100 million to various creditors before it folded.
Botha expects the enquiry to be wrapped up in the next two to three months. He adds that summonses against parties will be issued if this is necessary.
Claiming back
In addition to the investigation, Botha says the liquidators are still moving ahead with plans to hold ConvergeNet liable for Choice's failure.
ConvergeNet faces an R11 million lawsuit stemming from its aborted attempt to take over the now-defunct Choice Technologies early last year.
The company pulled out of its proposed rescue of Choice at the last minute and is being held liable for the costs that were incurred by Botha keeping Choice running as he sought to find a buyer during the second half of last year.
ConvergeNet CEO Pieter Bouwer says that, so far, Botha has not pursued a claim against the company as threatened, apart from a letter warning of impending legal action, to which ConvergeNet replied.
Bouwer previously said ConvergeNet is actually owed the money, because it paid accounts to the value of about R11 million on behalf of Choice, in terms of the rescue deal, and should have been paid back.
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ConvergeNet faces lawsuit
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