Director of Hughes food firm faces a big freeze from boardroom
The boss of a Co Armagh food business has been 'frozen out' of the boardroom for trying to move assets out of the reach of administrators and other corporate misdemeanours.
Kieran Patrick Hughes of Coharra Road in Portadown was disqualified as a director for 10 years by the Department of Enterprise, Trade and Investment – five years off the lengthiest sanction of 15 years away from directorships.
His company, Hughes Chilled & Frozen Distribution, stored and distributed frozen and chilled foods around Europe from its headquarters at Annesborough Industrial Estate in Lurgan and Carn in Portadown.
The firm went into administration on February 17, 2010 owing £2.5m after being in business for 15 years.
Mr Hughes, who is 55, gave a disqualification undertaking to the department, and admitted unfit conduct including keeping back around £1m which was owned to the Crown, which included £700,000 in unpaid Vat accumulated over two tax years, £114,000 in PAYE and £196,000 in unpaid national insurance contributions. Mr Hughes also created at least five false accounting records inorder to convince the administrator that the transfer to an associated company and a preferred transferee and taken place before the company went into administration.
However, the assets were transferred around the time that administrators KPMG were called in, meaning that the assets were moved in an attempt to keep them in the associated company beyond the reach of the administrators.
He also kept the company trading despite knowing that it was insolvent, a process which left creditors worse off.
He allowed his company to abuse its receivables finance agreement, an arrangement which enables it to use money owned by customers as collateral in a financing agreement.
Mr Hughes also admitted keeping inaccurate books and records. DETI said it had accepted 33 disqualification undertakings and the court had made five orders disqualifying directors in the financial year starting on April 1, 2013. It brings disqualification proceedings against failed companies "who have abused the privilege of limited liability status through negligence, incompetence or lack of commercial probity," DETI said.
During a period of disqualificaiton, a person cannot be a director, act as a receiver of a company's property or help set up, form or manage a company without the leave of the High Court.