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Testimonial – Director Disqualification Investigation dropped, for alleged transactions to the detriment of creditors, removal of company assets and misuse of the Coronavirus Bounce Back Loan scheme.

I am grateful to Mandeep Nagra for his thoroughness in this case….. he was detailed in his approach and I felt reassured throughout.”

This testimonial details how one of our director disqualification specialists, solicitor Mandeep Nagra, was able to persuade the Insolvency Service (‘IS’) to drop their director disqualification investigation into the conduct of an accountant for alleged transactions to the detriment of creditors, removal of company assets and misuse of the Coronavirus Bounce Back Loan scheme, which has led to custodial sentences in other cases.

The background to this director disqualification case

NDP were contacted by an Accountant who had received correspondence from the Insolvency Service, who were investigating the Director’s conduct in his Accountancy Practice, and whether director disqualification proceedings should be brought against him. The main areas of investigation were as follows:

  • Transaction to the detriment of creditors;
  • Removal of Company assets; and
  • Misuse of the Coronavirus Bounce Back Loan Scheme

Given that the targeted Director was an Accountancy Professional, he had a great deal to lose, including the possibility of him losing his licence if disqualified, and therefore being unable to practice.

Mandeep responded swiftly and thoroughly

Mandeep took detailed instructions from the Director, in order to firstly understand the nature of his business, and then obtained from him all relevant evidence, to prepare a detailed letter of representation on his behalf to send to the IS. Using this evidence, Mandeep, was able to set out in the letter of representation that there was no provable misconduct by the Director, by setting out the circumstances regarding the removal of the assets of the company, which was genuine and therefore no detriment to the company’s creditors.

Regarding the misuse of the Coronavirus Bounce Back Loan Scheme, Mandeep argued that it was used for solely for the economic benefit of the company, in particular helping with the company’s cashflow and to pay the company’s staff wages during a very difficult period.

Following receipt of the letter of representation the Insolvency Service wrote back to confirm that they did not propose to take disqualification proceedings against the Director.

The Director was delighted with the outcome

“I am grateful to Mandeep for his thoroughness in this case. Whilst knowingly having done nothing wrong, this needed to be presented to the IS in the correct way in order to bring any actions to an end promptly. Mandeep was detailed in his approach and I felt reassured throughout.”

Seek advice promptly if you are threatened with Director Disqualification by the IS

It is important when you receive a letter from the Insolvency Service, threatening Director Disqualification proceedings, to act promptly, and to seek advice. This case shows that with the right evidence and arguments in support, that investigations from the Insolvency Service can be dropped.

If you are a Director facing an investigation by the Insolvency Service for alleged misconduct including the misuse of a Bounce Back Loan, then please get in contact with our experienced team of Director Disqualification and regulatory solicitors on 0121 200 7040 or by email to law@ndandp.co.uk.