The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking from a Director of a Belfast civil and structural engineering company.
Robert Campbell Malseed (60) of Demesne Road, Holywood was disqualified for nine years in respect of his conduct as a director of FW Consulting Limited (“the Company”).
The Department had previously accepted disqualification undertakings for five years from two other directors on 4 September 2012 in respect of their conduct as directors of the same company.
The Company carried on the business of civil and structural engineering and project management from Bellsbridge Office Park, 100 Ladas Drive, Belfast and went into liquidation on 6 July 2010 with estimated assets available for preferential creditors of £90,295, liabilities due to preferential creditors of £673, liabilities of £362,578 to non-preferential creditors, and an estimated deficiency as regards creditors of £272,956. After taking into account the losses incurred by members (the shareholders) of the Company the total estimated deficiency was £273,056.
The Department accepted the disqualification undertaking from Robert Campbell Malseed on 15 August 2013 based on the following unfit conduct:
· causing and permitting the Company to retain a sum of £271,521 which was properly payable to the Crown consisting of £75,539 in respect of PAYE, £94,253 in respect of NIC and £101,729 in respect of VAT for the years 2008/09 to 2010/11;
· trading with knowledge of insolvency and to the detriment of the Company’s creditors;
· causing and permitting himself to be paid excessive remuneration when he knew, or ought to have known, that the Company was insolvent;
· failing to repay the entirety of the amount due on an overdrawn directors’ current account in the Company. He repaid £12,300 towards the amount due, but made no payments since 1 September 2012;
· preferring both himself and Bank of Ireland contrary to Article 203 (4) of the Insolvency (NI) Order 1989 prior to the Company entering into Liquidation. Robert Campbell Malseed did not accept this allegation. The Department maintains the allegation and contends that it can be proved.
The Department has accepted 55 Disqualification Undertakings and the Court has made six orders disqualifying directors in the financial year commencing 1 April 2013.
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. 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.
4. 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.
5. 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.
6. 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 028 9054 8508.
7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.