Directors of a Scottish conference centre and hotel have been banned from being company directors for a total of 16 years. The Insolvency Service launched an investigation after the business went into liquidation and £60,000 went missing from company accounts. Faced with debts of £269,500 the two directors went ‘on the run’ in an attempt to avoid the investigation.
Both individuals failed to keep company accounts so it has been impossible for investigators to ascertain the legitimacy of their transactions. Despite this the Insolvency Service was able to discover, through bank records, that the sale of a company asset in May 2007 resulted in a deposit of over £1.52m into an associated company’s account. The directors withdrew cheques to the value of £754 in a four-month period in 2006-2007.
In March 2008 the company’s liabilities amounted to a debt of more than £80000, and as such the directors’ transactions were carried out to the detriment of the creditors. The Insolvency Service found that the directors‘ conduct had shown that they were unfit to run a company and sought the disqualifications in the public interest. Neither director cooperated in the investigation or attended court to defend themselves.
This case shows that directors who do not run their affairs honestly and in the company’s best interests are at significant risk of losing the ability to conduct business in the future.