Company directors need to be aware that their actions can come back to bite them even after they have wound up their business!
In the latest figures published by the Insolvency Service, 1,242 directors were disqualified for misconduct. The average ban is around 5 years, but during 2018/19, 70 people received bans of between 11 and 15 years.
43% involved some form of tax misconduct, such as VAT fraud. Other examples of misconduct included dubious investment schemes and directors breaching a previous ban.
- A maximum ban for a director involved in complex VAT fraud which resulted in losses of over £7m
- A 14-year ban for the investment boss of a social housing investment scheme in Brazil. The company based in the West Midlands went into liquidation owing more than £21m to 350 investors after directors misled them into believing the scheme was valid.
- A Congleton-based husband and wife team were banned after duping businesses out of £1.7m to sponsor unnecessary educational materials, posing as a charity.
- The Courts disqualified a stooge director for 12 years after she illegally transferred £2.5 million worth of property assets to her father-in-law for £1 – just 4 days before the company was wound up.
Chris Knott, Director at BCR commented: ‘These may be extreme examples of dodgy directors… but the Insolvency Service can and will pursue directors post-insolvency if – even inadvertently – correct procedures are not followed. If you need advice at any time, do not hesitate to call us for a fast, independent response.’