The Department also accepted a disqualification undertaking for seven years from Paul John Macarthur (35) of Hedingham Road, Halstead, Essex in respect of his conduct as a director of Security Guard Company (NI) Limited.
JM Securities Limited was incorporated on 13 October 2003 and carried on the business of supplying security services mostly in the area of property protection from 201 Upper Newtownards Road, Belfast. It went into liquidation on 17 August 2007 with assets of £74,364, liabilities of £302,008 to creditors and an estimated deficiency as regards creditors of £227,644. After taking into account the losses incurred by members (shareholders, including the directors) of the company the estimated total deficiency was £227,645.
Security Guard Company (NI) Limited was incorporated on 21 February 2006 to take over the running of the business trading as JM Securities Limited. JM Securities Limited transferred its business to Security Guard Company (NI) Limited on 6 March 2006.
Security Guard Company (NI) Limited carried on the business of providing a range of security solutions to its customers from 33b Massey Avenue, Belfast and went into administration on 14 May 2007 and subsequently went into liquidation on 22 May 2008 with estimated assets of £255,002, liabilities of £708,667 to creditors and an estimated deficiency as regards creditors of £453,665. After taking into account the losses incurred by members (shareholders, including the directors) of the company the estimated total deficiency was £453,765.
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.
The Department accepted the disqualification undertaking from James Moffat on 27 April 2009 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
In respect of JM Securities Limited the unfit conduct alleged was:
- Intentionally swearing a Statement of Affairs for JM Securities Limited at 17 August 2007 which was materially inaccurate;
- Failing to file accounts for the period ending 31 March 2006;
- Retaining monies properly payable to the Crown and partly financing the continued period of insolvent trading by the retention of these monies;
- Causing and permitting JM Securities Limited to tender cheques to creditors without due regard to their being honoured upon presentation;
- Causing and permitting JM Securities Limited to trade at a time when it was insolvent from 18 May 2005 until September 2006;
- Failing to register charges with Companies Registry;
- Breaching his fiduciary duty to JM Securities Limited by allowing his director’s current account to remain overdrawn;
- Borrowing from the company a sum in excess of the amount allowed Under Articles 338(2) and 342 of the Companies (NI) Order 1986;
- Failing to obtain fair value for the transfer of the assets to Security Guard Company (NI) Limited, no consideration being obtained for the transfer of the assets.
In respect of Security Guard Company (NI) Limited the unfit conduct alleged was:
- Failing to prepare and submit a Statement of Affairs for Security Guard Company (NI) Limited;
- Causing and permitting Security Guard Company (NI) Limited to misuse a bank account in Lloyds TSB Bank Plc;
- Retaining monies properly payable to the Crown;
- Failing to learn from previous insolvencies.
The Department accepted the disqualification undertaking from Paul John Macarthur on 12 May 2009 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
In respect of Security Guard Company (NI) Limited the unfit conduct alleged was:
- Failing to prepare and submit a Statement of Affairs for Security Guard Company (NI) Limited;
- Causing and permitting Security Guard Company (NI) Limited to misuse a bank account in Lloyds TSB Bank Plc;
- Retaining monies properly payable to the Crown;
- Failing to learn from previous insolvencies.
The Department has accepted two Disqualification Undertakings and the Court has not yet made any Disqualification Orders in the
financial year commencing 1 April 2009.
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 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 ten years reserved for particularly serious cases, six to 10 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 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
7. For media enquiries please contact the DETI Press Office, telephone 028 9052 9297. Out of office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.
