Press release

9-year directorship ban for motor dealer who failed to account for over £1.3 million of cash withdrawals

John Henry Hierons, the sole director of Lenco Commercial Services Ltd a supplier of commercial vehicles based in Surrey, has been disqualified from acting as a company director for nine years following a trial in the County Court at Medway, for failing to provide proper accounting records for his company.

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The company traded from November 2010 to September 2012 yet an extensive investigation by the Insolvency Service after the company had gone into liquidation, revealed over £1.3 million cash had been withdrawn from the company bank account between February 2011 and September 2012 without any supporting documents. At liquidation in January 2013, the recorded deficiency was just under £26,000 of which £23,500 was stated as being owed to trade creditors.

The Secretary of State for Business, Innovation and Skills brought proceedings against John Henry Hierons (60) and on 4 July 2015, the case was heard in the County Court at Medway. Upon hearing the evidence, and with Mr Hierons failing to appear in court, a nine year disqualification order was made and Mr Hierons was ordered to pay costs in excess of £7,000.

The disqualification order means that Mr Hierons can not be a director of a company whether directly or indirectly, or be involved in the management of a company in any way for the duration of his disqualification unless he has permission from Court.

Mark Bruce a Chief Investigator with the Insolvency Service said:

This is a very serious case and one fully warranting a nine year disqualification. The disqualification sends a clear and robust message to other company directors that if you do not take your responsibilities seriously, like in this case, we will act to disqualify you.

John Henry Hierons withdrew a substantial amount of cash yet failed to provide bona fide documentary evidence whilst creditors went unpaid. Members of the public will no doubt be alarmed at his behaviour and that is why we have removed him from the business environment”.

Company directors have a statutory duty under the Companies Act to keep sufficient company records to satisfactorily explain payments and transactions.

Notes to editors

John Henry Hierons, 60, was director of Lenco Commercial Services Limited (CRO No. 07440144), which was incorporated in 2010.

Mr Hierons has been disqualified for a period of 9 years commencing from 25 September 2015.

One of the main purposes of the Company Directors Disqualification Act is to ensure that proper standards of conduct of company directors are maintained and to raise those standards where appropriate.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
  • be a receiver of a company’s property

In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations. Further information on director disqualifications and restrictions is available.

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.

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Published 23 October 2015