County Tyrone and County Derry/Londonderry directors agree to disqualification
Date published:
The Department for the Economy (the Department) has accepted disqualification undertakings from the directors of a company involved in other business support activities not elsewhere classified.
The undertaking was received for six years from Brian Donaghy (41) of Tandragee Road, Pomeroy, Dungannon, and for four years from Roddy Baxter (45) of Lever Road, Portstewart, Co. Londonderry, in respect of their conduct as directors of Agri-Trans Ltd (“the Company”).
The Company was involved in other business support activities not elsewhere classified with a registered office at 94 Ballycastle Road, Coleraine, BT52 2DZ. The Company went into liquidation on 5 March 2020 with an estimated deficiency as regards creditors of £291,014.41. There was a total of £2 owing as Share Capital, resulting in an estimated deficiency as regards members of £291,016.41.
The Department accepted the disqualification undertakings from Brian Donaghy on 5 December 2024 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
- Failing to co-operate with the liquidator. The Liquidator has been unable to carry out the investigations into the affairs of the Company. As a result, the liquidator has been unable to:
- obtain a sworn Statement of Affairs, therefore has not been able to determine the actual deficiency of the Company or seek an explanation for it and determine whether it arose from genuine trading difficulties.
- obtain evidence to explain the Company deficiency.
- obtain a Preliminary Examination Questionnaire and Narrative Statement.
- confirm what happened to the fixed assets listed on the last accounts for the year ended 31 May 2019.
- accurately determine the assets and liabilities of the Company.
- satisfy himself that all assets and liabilities of the Company have been properly accounted for.
- satisfy himself that the insolvency arose from genuine trading difficulties.
- investigate fully the circumstances leading to the failure of the Company or obtain any reasons for the failure; and
- Causing and permitting the Company to submit inaccurate VAT returns totalling £140,056.00 and a further sum of £17,126.00 of assessments raised by HMRC, resulting in a loss of monies properly due to the Crown from 2015/16. This represented 96% of the company’s overall adjusted deficiency in respect of VAT properly payable to the Crown. Furthermore, as he submitted inaccurate VAT returns, he failed to comply with his duties in terms of filing accurate VAT returns, which resulted in the large debt falling due to HMRC. He continued to run the Company without any regard to his obligations as a director in terms of compliance with the VAT regime. This resulted in the Company having more money than it ought to have had available to fund its continued trading.
The Department accepted the disqualification undertaking from Roddy Baxter on 5 December 2024 based on the following unfit conduct which solely for the purposes of the disqualification procedure were not disputed:
Failing to co-operate with the liquidator. The Liquidator has been unable to carry out the investigations into the affairs of the Company. As a result, the liquidator has been unable to:
- obtain a sworn Statement of Affairs, therefore has not been able to determine the actual deficiency of the Company or seek an explanation for it and determine whether it arose from genuine trading difficulties.
- obtain evidence to explain the Company deficiency.
- obtain a Preliminary Examination Questionnaire and Narrative Statement.
- confirm what happened to the fixed assets listed on the last accounts for the year ended 31 May 2019.
- accurately determine the assets and liabilities of the Company.
- satisfy himself that all assets and liabilities of the Company have been properly accounted for.
- satisfy himself that the insolvency arose from genuine trading difficulties.
- investigate fully the circumstances leading to the failure of the Company or obtain any reasons for the failure.
The Department has accepted 19 Disqualification Undertakings and the Court has made four Disqualification Orders in the financial year commencing 1 April 2024.
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.
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