The Department for the Economy (the Department) has accepted a disqualification undertaking from the director of a property development business.
The undertaking was received for nine years from Adrian Martin (54) of Moss Road, Carryduff, Belfast in respect of his conduct as a director of BMD Developments Limited (“the Company”).
The Company operated in the Property Development Industry from Moss Road, Carryduff, Belfast and went into administration on 5 May 2010 with estimated total assets of £675,000 subject to an estimated charge of £1,337,638, estimated liabilities to unsecured creditors of £59,709 and an estimated deficiency as regards creditors of £792,347. After taking into account the losses incurred by members (the shareholders) of the Company the estimated total deficiency was £792,447.
The Department accepted the Disqualification Undertaking from Adrian Martin on 6 November 2018 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
- failing to submit a Statement of Affairs for the Company;
- failing to account for £600,000 invested in the Company by third parties;
- failing to account for his share of £1,200,000 invested in the Company in return for preference shares;
- failing to give vacant possession of one of the property assets of the Company to the Administrator;
- causing and permitting the Company to fail to maintain and/or preserve and/or deliver up adequate accounting records;
- causing and permitting the Company to fail to maintain and/or preserve and/or deliver up the statutory books and records;
- submitting false and misleading accounts in respect of the company;
- failing to fully co-operate with the Administrator.
The Department has accepted four Disqualification Undertakings and the Court has made two orders disqualifying directors in the financial year commencing 1 April 2018.
Notes to editors:
- Insolvency Practitioners acting as voluntary liquidators, administrative receivers and administrators have a duty to report unfit conduct to the Insolvency Service within the Department for the Economy.
- 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.
- 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.
- 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.
- 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.
- 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 90 548582.
- The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
- For media enquiries contact DfE Press Office on 028 9052 9604. Out of office hours please contact the Duty Press Officer on 028 9037 8110.
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