Belfast director agrees to 10 year disqualification

The Department of Enterprise, Trade and Investment (the Department) accepted a disqualification undertaking for ten years from James McGregor, formerly of Inver Avenue, Belfast in respect of his conduct as a director of  Flexicare Limited.

In cases where a director offers a disqualification undertaking acceptable to the Department, thus avoiding a full hearing of the matter before the court, a shorter period of disqualification than would otherwise be appropriate is normally imposed.

In this case, the Department considered the unfit conduct to be of a serious nature, however it also took into account the responsible attitude shown to the proceedings by James McGregor through his willingness to enter into an undertaking.

Flexicare Limited carried on business as a wholesaler of furniture and retailer of soft drinks, toilet rolls, and paper product toiletries from 17/19 Bloomfield Road, Belfast; Mayo Street, Belfast; and Dunnes Retail Park, 307 Crumlin Road, Belfast and went into liquidation on 6 March 2006 with assets of £105,500 liabilities of £609,280 and an estimated deficiency as regards creditors of £503,780. After taking into account the losses incurred by members (shareholders, including the director) of the company the total deficiency was £503,782.

The Department accepted the disqualification undertaking from James McGregor on 27 September 2007 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

1. Submitting a materially inaccurate Statement of Affairs.
2. Producing false accounts for Flexicare Limited in order to obtain credit.
3. Failing to comply with Schedule 4 Part II of the Companies (Northern Ireland) Order 1986 in relation to the accounts for the year ended 30 November 2004 in that a debt should have been written off in the accounts on the basis that it was unlikely to be recovered.
4. Failing to learn from a previous insolvency.
5. Failing to maintain/preserve or deliver up full accounting records for Flexicare Limited.
6. Causing Flexicare Limited to fail to pay monies properly due to the Crown comprising outstanding Corporation Tax for the period  2004/05 of £23,331.24 and outstanding VAT for the period 2005/06 of £111,316.66 due to HM Revenue and Customs.
7. Failing to register Flexicare Limited with HM Revenue & Customs for PAYE and NIC.
8. Failing to file Annual Returns for Flexicare Limited for the period to 18 November 2004 and 18 November 2005 which were due to be filed by 16 December 2004 and 16 December 2005 and were not filed.
9. Failing to comply with Articles 290 and 291 of the Companies (Northern Ireland) Order in that he has caused Flexicare Limited to fail to have a company secretary for the period from 9 September 2003 to the date of Winding Up on 6 March 2006.
10. Failing to maintain and deliver up statutory records.

The Department has accepted 10 Disqualification Undertakings and the Court has made 6 Disqualification Orders in the financial year commencing 1 April 2007.

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. 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 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 02890 548516.
6. The period of disqualification commences at the end of the 21 days beginning with the day the disqualification undertaking was accepted by the Department.
7. For media enquiries contact DETI Press Office on 028 9052 9604. Out of office hours please contact the Duty Press Officer on pager number 07699 715 440 and your call will be returned.