company Investigations Contents Introduction who, what, why? - - PowerPoint PPT Presentation

company Investigations

Contents

• Introduction – who, what, why?
• Disqualification – misconduct types
• Criminal referrals
• Legislative developments

Who?

Investigations and Enforcement Services

What and Where?

Birmingham Insolvent Inv. Bristol Insolvent Inv. Cardiff Criminal Inv. Croydon Insolvent Inv. Edinburgh Insolvent Inv. Leeds Insolvent Inv. London Insolvent Inv. Live Inv. Manchester Insolvent Inv. Live Inv., Criminal Inv. Nottingham Criminal Inv. Southampton Insolvent Inv. Southend Insolvent Inv. Watford Criminal Inv.

And we get our work from…

 Compulsory Liquidations (Official Receiver in E & W)  Public complaints and media monitoring/ OGD liaison  Office Holder conduct returns (Voluntary Liquidations, Administrations, Admin Receiverships)

Some numbers….2018/19 results

• Insolvent reports reviewed – 9,059
• (sifted in conduct returns)
• Investigations commenced – 1,248
• (target rate 13.7%)
• Disqualifications obtained – 1,242
• Average timeliness 19.9 months from insolvency
• Average period 5.6 yrs, therefore around 7,000

disqualified individuals at any one point in time

• 372 Section 216 Breach rectifications (re-use of

company name)

• 229 Criminal Referrals

So what?

• Net benefit to the market place of £100,000 for every director

disqualified.

• Typically up to 30 people jailed each year, for an average

period of 6 - 12 mths, for continuing to run companies whilst banned. Section 15 CDDA provides for personal liability.

• Average ban 5.6 years, around 7 - 10% top bracket
• Publicity maximised to provide a deterrent and protect

the vulnerable:  Investment schemes/ Oppressive Sales Techniques  Pensions scams  BHS/ Carillion/ Keeping Kids Company

How do I get myself disqualified?

 Dishonesty is not a pre-requisite, serious negligence and/ or incompetence suffices.  Abrogation of duty is grounds for disqualification.  No monetary limits – detriment in the context of trading level.  Public Interest criteria kept under constant review.  Sufficiency of Evidence and Unfitness …The top five countdown…

…Some general rules…

The top five countdown:

• Misappropriation of assets
• Criminal breaches
• Post insolvency actions
• Accounting records
• Discriminatory treatment

(… usually against HMRC…)

Finalising the sanction

• Directors are offered a chance to undertake
• Undertakings achieved in around 80% of cases
• Costs sought where proceedings issued
• Proceedings issued in around 30% of cases
• <5% subsequently withdrawn or lost
• Section 17 applications for leave to act
• Typically around 40 – 50 per year with half granted subject to

conditions.

Tax-dodging Dundee newsagents banned from directorships (Dundee Courier)

• Mohammed Arshid ,61, and Maqsoodan

Arshid, 57 cheated the taxman out of more than £1 million to pay for the private education

• f their children and home improvements
• The business under-declared and concealed

tax liabilities for 17 years, submitting false P35 returns and concealing VAT liabilities between 1996 and 2013 causing lost tax revenue of over £900,000

• Bans of 11 years for Mr Arshid and 2 years for Mrs Arshid
• Mr Arshid previously jailed for perjury in helping to clear a man who

had been accused of threatening a business associate with murder by the Taliban.

It’s criminal…

Legislative Developments

• Powers to obtain compensation orders against

directors where their conduct has direct causal link to loss of a creditor or class of creditor.

• Able to obtain a disqualification order following an
• verseas conviction for a corporate offence.
• Presently legislating to permit the investigation of

dissolved companies and the disqualification of directors of holding companies who unreasonably sell insolvent subsidiaries.

Contacts

Robert.Clarke@insolvency.gov.uk Steven.McGinty@insolvency.gov.uk Peter.Rout@insolvency.gov.uk www.gov.uk/insolvency-service