Ballygowan director agrees to disqualification

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for seven years from Kenneth Ian Shenton (46) of Saintfield Road, Ballygowan, County Down, in respect of his conduct as a director of Call 4 Loans Limited.

Call 4 Loans Limited (the Company) carried on the business of Brokers for the provision of mortgages and secured loans from 22 Hamilton Road, Bangor, and went into liquidation on 3 August 2005 with assets estimated to realise £5,348, liabilities of £28,074 to preferential creditors, liabilities of £211,943 to non preferential creditors and an estimated deficiency as regards creditors of £234,669. After taking into account the losses incurred by members (shareholders, including the directors) of the company, the total estimated deficiency was £236,669.

The Department accepted the disqualification undertaking from Kenneth Ian Shenton on 20 November 2008 based on the following unfit conduct, which solely for the purposes of the disqualification procedure was not disputed:

·Causing and permitting Call 4 Loans Limited to retain a total of £63,555.42 properly due to the Crown comprising outstanding PAYE and NIC for the periods 2001/02 to 2004/05;

·Taking remuneration in excess of what Call 4 Loans Limited could afford to pay thus increasing materially the insolvent position of the company to the detriment of creditors;

·Overstating the work in progress in Call 4 Loans Limited’s accounts by £67,337 (49%) for the year ended 31 March 2004 which meant that the net liabilities of £12,612 disclosed in the 2004 accounts were also understated so that the accounts for the year ended 31 March 2004 that were filed with Companies Registry were misleading.

The Department has accepted 17 Disqualification Undertakings and the Court has made one Disqualification Order in the financial year commencing 1 April 2008.

Notes to Editors

1. The Official Receiver, when a company is wound up by the Court, has a duty to investigate the causes of failure and report any unfit conduct to the Insolvency Service within the Department of Enterprise, Trade and Investment.
2. The aim of the Department is to bring disqualification proceedings against those directors of failed companies who have abused the privilege of limited liability status through negligence, incompetence or lack of commercial probity. The legislation contained in the Company Directors Disqualification (Northern Ireland) Order 2002 (“the 2002 Order”) is for the protection of the public and trading community but its operation should not inhibit genuine enterprise.
3. In cases where a person is subject to either a Disqualification Order made by the Court or a Disqualification Undertaking accepted by the Department, that person shall not be a director of a company, act as a receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless he has the leave of the High Court. A disqualified person cannot obtain permission to act as an Insolvency Practitioner.
4. Article 9 of the 2002 Order provides that where a director is found to be unfit he must be disqualified for a minimum period of two years, up to a maximum of fifteen years. The Courts have decided that the level of seriousness of unfit conduct can fall into three brackets with the top bracket of periods over ten years reserved for particularly serious cases, six to ten years reserved for cases which do not merit the top bracket and two to five years for cases where, although disqualification is mandatory, the case is less serious.
5. The 2002 Order also allows directors, with the agreement of the Department, to avoid the need for a court hearing by offering an acceptable Disqualification Undertaking. This has exactly the same legal effect as a Disqualification Order made by the court, and will usually include a schedule identifying the director’s unfit conduct. The consequences of breaching a Disqualification Undertaking are the same as those for breaching a Disqualification Order.
6. If anybody contravenes a Disqualification Order or breaches their Disqualification Undertaking they may be committing a criminal offence and could go to prison for up to two years or face a fine or both. Any person with information to suggest that a disqualified person has acted in contravention of this provision should contact The Insolvency Service’s Directors Disqualification Unit on 028 9054 8516.
7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
8. For media enquiries contact DETI Press Office on 028 9052 9604