Armagh director disqualified

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for eight years from Vivion Philip Connolly (53) of Woodford Drive, Armagh, Co Armagh in respect of his conduct as a director of Connolly Fancy Goods Ltd.

Connolly Fancy Goods Ltd (the Company) carried on the business of furniture sales from North Louth Retail Park, Coes Road, Dundalk and had formerly carried on business at Irish Street, Dungannon; Lurgan; Newry; Moy and Boucher Road, Belfast.

It went into liquidation on 15 February 2007 with estimated assets of £6,800, no liabilities to preferential creditors, liabilities of £1,165,476.26 to non preferential creditors and an estimated deficiency as regards creditors of £1,158,676.26. After taking into account the losses incurred by members (shareholders, including the directors) of the company the total deficiency was £1,158,679.26.

The Department accepted the disqualification undertaking from Vivion Philip Connolly on 20 October 2009 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

(a) Engaging in the practise of cheque kiting by exploiting delays inherent in the banking system to the detriment of creditors, namely HSBC Bank, First Trust and Ulster Bank;

(b) Causing and permitting Connolly Fancy Goods Limited to trade at a time when it was insolvent from at least 7 April 2005;

(c) Causing and permitting Connolly Fancy Goods Limited to fail to pay £39,228.99 of debts properly payable to the Crown in respect of VAT in the period June 2005 to March 2006;

(d) Causing and permitting Connolly Fancy Goods Limited to misuse bank accounts in First Trust, HSBC and Ulster Bank, by tendering cheques without due regard to them being met upon presentation in that 11 cheques totalling £77,536 were dishonoured on the Connolly Fancy Goods Limited account at First Trust in the period April 2005 to January 2006, three cheques totalling £51,000 were dishonoured on the Connolly Fancy Goods Limited account at HSBC in January 2006 and eight cheques totalling €70,690 were dishonoured on the Connolly Fancy Goods Limited account at Ulster Bank in the period June 2002 to June 2004.

(e) Causing and permitting Connolly Fancy Goods Limited to file late, annual returns with companies registry, for the years to 8 March 1996, 8 March 1997, 8 March 1998, 8 March 1999, 8 March 2004 and 8 March 2005.

There have been 14 directors disqualified in the financial year commencing 1 April 2009.

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 were a director is found to be unfit he must be disqualified for a minimum period of two years, up to a maximum of 15 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 10 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 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 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 90529297. Outside office hours, please contact the Duty Press Officer via pager number 07699715440 and your call will be returned.