The Insolvency Service says the director failed to act with reasonable care, skill and diligence as the primary reason for his director disqualification
A fourth company director has received a director disqualification for his role in a scheme involving unauthorised banking transactions worth almost £14 million. The director allowed unarranged overdrafts with Barclays Bank to be used to make transfers of more than £1.6 million from the accounts of two companies he directed in 2021. He has accepted a seven-and-a-half-year disqualification undertaking.
The Insolvency Service has now secured director disqualifications worth a combined 38 years against the director, his half-brother and two other associates.
What the Insolvency Service found
The Insolvency Service found that the director failed to ensure the funds could be repaid to Barclays on demand, breaching the bank’s terms and conditions. Most of the transfers were to connected companies controlled by the director’s half-brother and associates.
He signed bank account application forms for the two companies involved in late April 2021. He named his half-brother as the primary contact for the accounts. Four bank accounts were opened for the companies the following month and were used for the first time in mid-July.
From then until September 2021, the director failed to adequately monitor their use. He allowed unarranged overdrafts on one of the company’s accounts to be used to make net payments of £1,042,220, most of which were transfers to connected companies. A further £586,454 in net payments were made from unarranged overdrafts on the second company’s account to a connected company.
Barclays secured freezing orders for the accounts on 24 September 2021 and demanded repayment of £1,056,970 from the first company and £600,114 from the second company. No repayments were made and the two companies entered liquidation in January 2022.
The outcome: seven-and-a-half-year director disqualification
The director was due to stand trial at the High Court in Manchester in late July 2026. He signed a disqualification undertaking, a legally binding agreement in which a director agrees to be disqualified and does not dispute certain facts, to end court action against him.
The Secretary of State for Business and Trade accepted the undertaking on Friday 17th July 2026, and the ban came into effect on Friday 7th August. It prevents him from acting as a director and being involved in the promotion, formation or management of a company, without the permission of the court.
Victoria Edgar, Chief Investigator at the Insolvency Service, said:
“Acting as a company director comes with responsibilities which must be taken seriously.”
The Director… “failed to exercise the standard of care, skill and diligence reasonably expected of a director responsible for the affairs of a company.
We have now secured director disqualifications worth a combined 38 years against” … all 4 directors involved … “proving that civil sanctions are an effective tool against those who have so clearly demonstrated they are unfit to direct companies.”
Neil Davies comments*
Neil Davies, solicitor and director at NDP said:
“The numbers in this scheme are big, running to many millions, yet the disqualification here is only seven-and-a-half years.”
(*Neil is a member of the Advisory Board to the leading text on Director Disqualification law and practice, ‘Mithani on Directors’ Disqualification’, the leading publication on Director Disqualification Law and Practice)
How our Director Disqualification solicitors can help
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Frequently asked questions on Director Disqualification
What is a disqualification undertaking?
A legally binding agreement in which a director agrees to be disqualified and does not dispute certain facts. In this case, the director signed one to end court action against him.
What does a director disqualification prevent?
It prevents the person from acting as a director and from being involved in the promotion, formation or management of a company, without the permission of the court.
What should a director do if they are worried about director disqualification?
Seek specialist legal advice immediately. Early engagement, proper preparation and a clear understanding of the allegations can significantly influence the outcome.
