County Durham directors receive lengthy bans after overstating sales by over £1bn
Two former directors of Newton Aycliffe-based Linden Group Limited have been disqualified from acting as company directors after the company recorded false sales income of over £1 billion per year.
John and Carmel Billany were disqualified as directors for nine years and three years six months respectively after they had inflated the company’s turnover from around £3 million, to an annual turnover of £1.2 billion in order to obtain finance.
The company, which supplied hydraulic components, became insolvent in September 2013 after owing money to a finance company.
The disqualifications follow an investigation by the Insolvency Service.
Commenting on the disqualification, Mark Bruce a Chief Investigator with the Insolvency Service, said:
These disqualifications should demonstrate to company directors that the Insolvency Service will investigate all forms of misconduct, no matter how complicated the evidence or how long the paper trail is.
We will always look to remove from the business community those directors who act below the standards that should be expected of them.
Both provided disqualification undertakings to the Secretary of State for Business, Innovation and Skills. Solely for the purposes of the undertaking, John Billany did not dispute that he caused Linden Group raise false sales invoices, and Carmel Billany did not dispute that she neglected her duties as a director and allowed this to happen.
Linden’s records for the year ended 31 December 2012 show a turnover of over £1billion, and records for the period from January to May 2013 show a turnover of more than £100million per month. Linden’s real turnover was in the region of £3m per year.
Following the insolvency, the trade of Linden Group was sold by the liquidator to an unconnected company which continues the business using a similar name. John and Carmel Billany have no connection with that company.
The disqualification means that Mr and Mrs Billany may not be directors of a company or be involved in the management of a company in any way for the duration of the disqualifications unless they have permission from Court.
Notes to editors
John Edward Billany and Carmel Margaret Billany, both 68, were directors of Linden Group Limited, which was incorporated in 1987 and traded in the north east of England.
Mr Billany has undertaken not to act in the management of a company for a period of 9 years from 11 August 2015.
Mrs Billany has undertaken not to act in the management of a company for a period of 3.5 years from 11 August 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.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. 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: 13 August 2015
From: The Insolvency Service