Director disqualified after failing to account for missing funds
A company director has been disqualified for eight years after failing to account for missing assets and funds at a time when his business was struggling to stay afloat.
The company went into liquidation owing nearly £600,000. An investigation by the Insolvency Service found that when the debts started to mount up, the director had transferred £122,000 to his partner. This was at a time when the company owed substantial amounts of money that it had no prospect of repaying.
The director also failed to account for more than £82,000 worth of motor vehicles and almost £8,000 worth of other equipment purchased by the company. The failure to maintain adequate accounting records resulted in other expenditure totalling almost £600,000 remaining unexplained.
Robert Clarke, Chief Examiner at Insolvent Investigations North, said: “Directors, like this, who favour themselves over the interests of legitimate creditors when their company is in financial difficulty and remove funds for personal benefit, leaving suppliers high and dry, are not only in breach of a fundamental fiduciary duty but lacking in commercial morality.
“This disqualification is a reminder to others tempted to do the same that the Insolvency Service will rigorously pursue enforcement action and seek to remove from them the privilege of trading with limited liability to protect the public for a lengthy period.”
Please contact Simon Porter if you would like more information about the issues raised in this article or any aspect of directors’ duties and compliance.