County Down director disqualified by the court

Mark Adrian Magowan (43) of Baylands, Fourth Avenue, Bangor, County Down was disqualified for nine years on the 15 March 2007, in the High Court, Belfast, in respect of his conduct as a director of Magowan Agencies Limited.

Magowan Agencies Limited carried on the business of electrical wholesalers from Unit 1, 57-59 Duncrue Crescent, Belfast and went into liquidation on 8 October 2004 with assets estimated to realise £30,064; liabilities of £794,363 and an estimated deficiency as regards creditors of £764,299. After taking into account the losses incurred by members (shareholders, including the directors) of the company the total deficiency was £804,299.

The matters of unfit conduct, alleged by the Department of Enterprise, Trade and Investment (the Department) in relation to Mark Adrian Magowan in respect of his conduct as a director of Magowan Agencies Limited were:

• Causing and permitting the Company to trade from 1 January 2004 to 8 October 2004, at a time when he knew, or ought to have known it was insolvent and when such trading was to the detriment of creditors;
• Causing and permitting the Company to raise invoices in respect of debts not due to the value of £485,000 thereby obtaining funds of £339,000 from Northern Bank Factors Limited to which it was not entitled under the terms of an Invoice Discounting Agreement;
• Causing and permitting the Company to be financed by non-payment of £82,874.84 properly payable to the Crown for PAYE, NIC and VAT;
• Causing and permitting the Company to misuse an account with the Northern Bank in that during the period 27 January 2004 to 31 August 2004, 26 cheques with a total value of £85,201.67 were tendered to creditors, without due regard to them being honoured upon presentation;
• Failing to co-operate with the Office Holder.

The Department has accepted one Disqualification Undertaking and the Court has made one Disqualification Order in the financial year commencing 1 April 2007.

Notes to Editors:

1. Insolvency Practitioners acting as voluntary liquidators, administrative receivers and administrators have a duty to report 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. 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.
4. 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.
5. 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 2 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 90 548516.
6. The period of disqualification commences at the end of 21 days beginning with the day the Order was made by the Court.
7. For media enquiries contact DETI Press Office on 028 90 529604.