Director Disqualification: A Director and a Shadow Director jailed for fraud and disqualified as Directors.
This article shows that director disqualification can apply to “shadow” directors as well as directors, as demonstrated by this case, where a Mansfield based company director, Amanda Jones and her husband Robert Jones, a shadow director of the company, were both sent to jail for helping themselves to their company’s money, as well as being disqualified as directors.
What is a Shadow Director and what were the offences?
The case is detailed in a recent press release where the Insolvency Service confirmed that the couple’s company, Armston Developments Limited (“The Company”) was ordered into Compulsory Liquidation on 18 October 2010.
“A shadow director means a person in accordance with whose directions or instructions the directors of the company are accustomed to act. A shadow director often acts behind the scenes, which may be because there is a reason why they cannot be formally appointed.”
Amanda Jones was an appointed director of the Company.
The brief details of the case are that another director of the Company made a transfer, by internet banking, of funds from the Company account to other Company accounts that were in overdraft. It would appear that Robert and Amanda Jones, the defendants, objected to that and instructed the bank to reverse the payment and thereafter removed the funds from the Company account.
In addition, the press release confirms that when interviewed by the Official Receiver, Robert Jones lied when he stated that he did not know to whom the Company’s stock had been sold following the liquidation when in fact he had taken it at no cost to himself.
The Punishment? Custodial Sentences and Director Disqualification
At Nottingham Crown Court Mr. and Mrs. Jones were sentenced to two and half years in custody and a further eighteen months suspended for two years for fraudulently removing just short of £130,000 from the Company account.
Robert Jones was also convicted and sentenced for removing a further £10,000 in funds from the Company’s bank account and over £360,000 in value of stock, as well as for the offence of perjury.
In addition, the Criminal Court disqualified Mr. and Mrs. Jones were given director disqualification periods by the Criminal Court of seven years each.
How we can help in matters of compulsory liquidation and director disqualification?
As Director Disqualification Solicitors, if the Company of which you are a director is ordered into compulsory liquidation then we recommend that you take legal advice in order to complete the initial Directors’ questionnaire. The director should also consider seeking a solicitor to accompany them at any subsequent interviews with the Official Receiver or the Insolvency Service in order to best manage the situation.
Further, if as a director (or someone other than a director registered at Companies House, such as a shadow director) you are facing an investigation, then please speak to one of the team at NDP immediately.
NDP have two experienced regulatory law solicitors in David Hanman and Stephen Chinnery who lead a team of people who can assist you.
We are also experts in director disqualification, so if you are facing director disqualification proceedings then please also speak with a member of the team by contacting us or calling us on 0121 200 7040. It is always the case that the earlier you speak with us the more likely it is that we can help.