The Department of Enterprise, Trade and Investment (the Department) has accepted disqualification undertakings for seven years each from the Directors of a Ballymena property development company.
Colin Thomas Millar (46) of Carnalbanagh Road, Broughshane, (formerly of Aghanure Road, Broughshane) and Sharleen Millar (44) of Aghanure Road, Broughshane were disqualified in respect of their conduct as directors of CTM Developments Limited (“the Company”).
The Company carried on the business of the purchase, development and sale of land and property from Aghanure Road, Broughshane, Ballymena, Co. Antrim from June 2003 until the cessation of trading in September 2007. It went into liquidation on 6 August 2010 with estimated total assets available for preferential creditors of £295,000, liabilities to unsecured creditors of £597,876, and an estimated deficiency as regards creditors of £302,876. After taking into account the losses incurred by members (the shareholders) of the Company the total estimated deficiency was £302,878.
The Department accepted the disqualification undertaking from Colin Thomas Millar and Sharleen Millar on 13 June 2013 and 25 June 2013 respectively based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
· misapplying/misappropriating company funds in that they caused the Company to make a loan to a newly established company, H Ireland & Son Ltd, in order to capitalize the new company, with negligible commercial benefit to the Company, at a time when there was no clear prospect of H Ireland & Son Ltd being able to repay the loan. The loan advanced to H Ireland & Son Ltd was of an amount greater than the value of the Company and no steps were taken to ensure security for the loan or guarantee its repayment.
The following additional matter of unfit conduct alleged by the Department in relation to Colin Thomas Millar and not disputed was:
· withdrawing funds from the Company for his own personal benefit to the detriment of the Company’s creditors and without the recorded consent of the Company shareholders in contravention of Articles 338(2) and 342 of the Companies (Northern Ireland) Order 1986 and Section 197(1) of the Companies Act 2006.
The following additional matter of unfit conduct alleged by the Department in relation to Sharleen Millar and not disputed was:
· permitting Colin Thomas Millar to withdraw funds from the Company to the detriment of the Company’s creditors and without the recorded consent of the Company shareholders.
The Department has accepted 33 Disqualification Undertakings and the Court has made five orders disqualifying directors in the financial year commencing 1 April 2013.
Notes to editors:
1. Colin Thomas Millar and Sharleen Millar are married.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 548508.
8. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.