The Insolvency Service
We have published official statistics detailing the enforcement outcomes achieved in the year to March 2016.
The cause of company failure is examined in every insolvency and we can seek to disqualify directors for between 2 and 12 years where our investigation finds unfit behaviour.
We also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK and will seek to find up those who are acting against the public interest.
An Official Receiver can also see to have the restrictions of bankruptcy extended for between 2 and 15 years if it is considered that the conduct of a bankrupt has been dishonest or blameworthy.
Recent disqualification results include:
- in 2015-16, 47 directors have been disqualified for a total of 290 years for employing illegal workers
- the director of an investment company was disqualified for 14 years in March for mis-selling half a million pounds of worthless Rare Earth Metals as investments to members of the public
- two directors were disqualified in February for 15 years each for selling worthless Voluntary Emission Reductions (a type of carbon credit) to the public at between two and six and a half times the price it had paid its supplier
Live Company Investigations
Amongst the companies wound up in the public interest:
- two companies, via their agents, misled almost 100 small businesses into each paying between 495 and 2,500 for services to challenge business rate valuations. None were revalued
- one company made false and misleading claims in persuading the elderly and vulnerable to purchase grossly overpriced and unnecessary health supplements
- a small London clothing company fabricated information enabling it to get significant credit, which it could not repay. It had falsely claimed it produced clothing for various major films and for the opening and closing ceremonies of the Olympics
Bankrupts recently restricted include:
- a bankrupt, previously the subject of an 11 year Bankruptcy Restrictions Order (BRO), was given a 12 year BRO in February, for his repeated non-disclosure of assets and a failure to comply with livestock and supply of labour regulations
Action was taken by the Insolvency Service against companies and individuals whose conduct related to pensions funds or individual pension pots. These included:
- a director who was disqualified for 12 years for facilitating a pension fraud by failing to ensure that the company he controlled met its obligations to its Defined Benefit Pension Scheme and causing an associated, dormant, company, to facilitate a series of transactions which enabled an unconnected Russian company to avoid its liabilities to the Scheme. As a result, The Pension Fund, which contained over 500 members, suffered a loss of over 26 million
- two companies, which were, respectively, the trustees of two pension schemes, were wound up in the public interest by the High Court following our investigation. The investigation found that members of the public had been cold-called and persuaded to transfer their existing occupational pensions (totaling 13.4 million) into either of the schemes on the basis of misrepresentations made as to an initial guaranteed rate of return and also on the promise of an entitlement to receive 25% of the fund value at age 55 and, in the case of one of the schemes, of a 5% non repayable loan
- two North West-based companies, which were wound up by the High Court for operating a misleading pension-backed loan and investment scheme in which clients invested 11.9 million. The companies operated what is commonly known as a pension liberation scheme. Clients were encouraged to obtain a loan from one of the companies, on the condition that they used their existing pension funds to purchase shares in the second