Tuesday 16:34
A director of a colour printing business and its holding company that failed with total debts estimated at around £3.6 million has given an Undertaking not to hold directorships or take any part in company management for four years.
The Undertaking by Kenneth Robert Collier, aged 70, of Bush Hill, London N21, was given in respect of his conduct as a director of C/S/M Sheet-Fed Limited and C/S/M Group Limited, which carried out business from premises at Unit 1, Britannia Way, Coronation Road, London NW10 7PW.
Acceptance of the Undertaking on 10 October 2003 prevents Mr Collier from being a director of a company or, in any way, whether directly or indirectly, being concerned or taking part in the promotion, formation or management of a company for the above period.
C/S/M Sheet-Fed Limited was placed into voluntary liquidation on 20 June 2002 with estimated debts of £1,891,070 owed to creditors.
C/S/M Group Limited went into administration on 13 August 2001 and was wound up by the Court on 2 October 2002 with estimated debts of £1,771,396 owed to creditors.
The Insolvency Service, on behalf of the Secretary of State for Trade & Industry, has responsibility (under Section (6) of the Company Directors Disqualification Act 1986) for the investigation of the conduct of directors of failed companies and for the disqualification of those who are considered to be unfit to be involved in the management of companies in the future.
Matters of unfit conduct, not disputed by Mr Collier, were that he: * caused Sheet Fed to enter into an agreement dated 19 May 1998 (the 1998 Agreement) thereby obliging Sheet Fed to pay £26,250, £13,671.88 and £3,500 per month to himself, and the other directors of Sheet Fed and Group, Ann Margaret Josephine Chelton and Nicholas Long, respectively. Payments to Mr Long increased to £13,416.67 per month after 30 months. The payments were consideration for the transfer of shareholdings in Group to Jeffrey Charles Alexander. Entry into and implementation of the 1998 Agreement was: i. in breach of his common law and fiduciary duties as a director of Sheet Fed, there being no consideration for Sheet Fed's obligation to make such payments; ii. not in the best interests of Sheet Fed, in that the 1998 Agreement obliged Sheet Fed to pay a monthly total of £43,421.88 for 30 months and £27,088.55 for the following 18 months in circumstances where it was inappropriate for it to do so given Sheet Fed's financial position. In particular as at 30 April 1998 Sheet Fed had net assets of only £14,092 and retained profits of only £3,567, and in the following two years Sheet Fed carried forward losses of £115,880 and £365,256 respectively. The 1998 Agreement was improper, being in breach of section 151 of the Companies Act 1985, which prohibits a company or any of its subsidiaries from giving financial assistance directly or indirectly for the purpose of the acquisition of shares in the company;
* permitted Mrs Chelton to run an off balance sheet account known as the Leonard Bloch Account (his involvement ceasing after 31 December 1998). Alternatively, he failed to inform himself of the financial operation of Group and Sheet Fed and thereby enabled Mrs Chelton to operate the Leonard Bloch Account; and
* caused or allowed Sheet Fed to sell a subsidiary company, C/S/M Impact Limited, to Mrs Chelton's husband and his business partner at less than its true value and without having obtained a professional valuation of Impact.
Notes to editors
1.The Insolvency Service is an executive agency of the Department of Trade and Industry with responsibility for both the regulation of Insolvency Practitioners and for company directors' disqualifications.
2.Insolvency Practitioners are authorised to deal with the administration of a range of company insolvency procedures including administrations and administrative receivership and creditors' voluntary liquidation. Insolvency Practitioners are required to report to the Insolvency Service on the conduct of company directors' work in each of these proceedings with a view to identifying behaviour that might make these directors unfit to be involved in company management in the future.
3.The Insolvency Service considers the voluntary practitioners' reports and, where appropriate, will investigate the conduct of directors with a view to taking disqualification proceedings on behalf of the Secretary of State.
4.A court can disqualify directors from directorships and involvement in the management of companies for between two and 15 years for unfit conduct. If a director breaches a Disqualification Order they can be prosecuted and may be punished by a fine, a prison sentence of up to two years, or both, and may be made personally liable for the company debts.
5.Directors who accept that their conduct is unfit can give an Undertaking to the Secretary of State that they will not become involved as a director or in the management of a limited company for an agreed period of between two and 15 years. This avoids a court process, but the penalties for breach of an Undertaking are the same as for breach of a court order. 6.Companies House maintains a public register of disqualified directors that can be viewed at http://www.companieshouse.gov.uk. Addresses given are those correct at the time of the company failure, but may not now be current.
7.Members of the public who think that they know of any person who is acting in breach of a Disqualification Order or Undertaking should report that person's details to The Insolvency Service Disqualified Directors Hotline on 0845 601 3546 (24 hour message service). General enquires to The Insolvency Service should be addressed to the General Enquiries Help line on 020 7291 6895.
For further information about the Insolvency Service and disqualification see http://www.insolvency.gov.uk
Issued on behalf of the Insolvency Service by the Government News Network, London. For more information please contact Philip Sutcliffe on Tel: 020 7261 8787; Fax: 020 7928 8450; Email: Philip.Sutcliffe@gnn.gsi.gov.uk
Regional news releases for Government departments can be viewed at http://www.gnn.gov.uk
