County Down directors disqualified

The Department has accepted Disqualification Undertakings from the directors of a company which operated in the business of a Hotel and Restaurant.

Director Disqualification Undertaking

The Undertakings were accepted for six years from Kenneth Ronald Charles Sharp (53) of Donaghadee Road, Bangor, Co Down, BT20 4QX and for three years from Lisa Sharp  (Nee Bugge) (55) also of Donaghadee Road, Bangor, Co Down, BT20 4QX, in respect of their conduct as directors of Saline Canine Limited (“the Company”).

The Company operated from premises at 10-12 Seacliff Road, Bangor, County Down and went into Liquidation on 19 December 2018, with estimated total assets available to creditors of £19,042, estimated liabilities to unsecured non-preferential creditors of £449,759 and an estimated deficiency as regards creditors of £430,717. After taking into account the losses incurred by members (the shareholders) of the Company the estimated total deficiency was £430,727.

The Department accepted the Disqualification Undertaking from Kenneth Sharp on 19 June 2023, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

1. Causing and permitting the Company to operate a policy of discrimination against the Crown by retaining monies properly due totalling £287,324.10 from 2016/17.   This represented 61% of the Company’s overall revised deficiency in respect of PAYE / NIC and VAT. He also caused and permitted Saline Canine Limited to operate a policy of discrimination in that payments were made to trade creditors at a time when the HMRC debt continued to increase; and

2. Failing to learn from previous insolvencies and / or demonstrating a repeated pattern of unfit conduct and causing and permitting the incorporation of Saline Canine Ltd as a phoenix company so as to take over the business previously carried out by Keli Frecha Hospitality Limited.

The Department accepted the Disqualification Undertaking from Lisa Sharp on 26 June 2023, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

1. As a named Director of the Company, she failed to act in such a way so as to prevent the Company from operating or potentially operating a policy of discrimination against the Crown by retaining monies properly due totalling £287,324.10 from 2016/17.   This represented 61% of the Company’s overall revised deficiency in respect of PAYE / NIC and VAT. She also failed to act in such a way so as to prevent Saline Canine Limited operating or potentially operating a policy of discrimination in that payments were made to trade creditors at a time when the HMRC debt continued to increase.

The High Court has made two Disqualification Orders and the Department has accepted five Disqualification Undertakings in the financial year commencing 1 April 2023.

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 for the Economy.

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 90 548582.

7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.

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