Loan company director disqualified for 9 years
David Gary Drysdale, the sole director of loans arranging company, Welcome Loans Limited based in Glasgow, has been disqualified from acting as a director for 9 years for failing to keep proper company books, concealing the company’s assets and failing to act in good faith towards the company’s customers. The disqualification follows an investigation by the Insolvency Service.
Mr Drysdale, 32, was unrepresented and failed to appear in court, was banned from acting as a director of a limited company until 15 September 2024.
The company provided loan arrangement services which acted as a “middle man” for individuals who wanted to obtain loans from loan providers, at a one off fee of £59 and subsequently increased to £80. The company went into liquidation on 3 July 2013, almost 5 months after Mr Drysdale first approached an Insolvency Practitioner for insolvency advice on 14 February 2013.
Mr Drysdale failed to provide sufficient books or records explaining the company’s transactions or co-operate with the Insolvency Practitioner administering the affairs of the company in liquidation prior to and during the course of the liquidation.
Latterly, he failed to assist the Insolvency Service during the course of its investigations.
Both the administration of the liquidation and the investigations were seriously hampered by the lack of available books and Mr Drysdale’s lack of co-operation. It was discovered that even though the company was very profitable, it paid just £15,000 to the Crown departments, with Mr Drysdale receiving at least £683,018 from the company during the course of the company’s life. HMRC is owed at least £287,476 in the liquidation due to unpaid Corporation Tax and tax on Mr Drysdale’s drawings.
It later transpired that Mr Drysdale had delayed providing the Insolvency Practitioner with the company’s books and records and information as he was attempting to secure the release of the company’s £271,544 available funds held in a Mauritius merchant bank account for his own benefit. It was 2 months after the liquidation that Mr Drysdale finally revealed the existence of these funds to the Insolvency Practitioner. He had attempted to secure the release of these funds by producing and providing a payment processing company managing the merchant bank account with a forged official document. The Insolvency Practitioner faced difficulties recovering these funds for the benefit of the company’s creditors.
Some 3 months before Mr Drysdale first contacted the Insolvency Practitioner, the company was contacted by the Financial Ombudsman Service in relation to complaints received from various aggrieved customers who requested refunds of fees from the company for unfulfilled services or overcharging. 14 February 2014, was the deadline given to the company by the Financial Ombudsman Service to make refunds to complaining individual customers, now creditors in the liquidation. Whilst Mr Drysdale refused to refund at least 233 known complaining customers, he had helped himself to the company’s funds during the period, by paying himself £10,000 per week and £97,007 towards a Bentley purchase for his personal use. Mr Drysdale had informed the Insolvency Practitioner that he did not believe that these customers were owed anything; despite him initially informing the Financial Ombudsman Service of his intention to provide refunds to the customers.
Commenting on the disqualification, Mark Bruce, a Chief Investigator at The Insolvency Service said:
Mr Drysdale has shown himself to be exactly the type of businessman who should be removed from the business area. His cavalier attitude to his customers and the various regulatory bodies he faced was seen as extremely serious by the court in handing down a lengthy disqualification.
The Insolvency Service will always investigate such behaviour especially where there has been significant financial loss to members of the public
Notes to editors
Welcome Loans Limited (CRO No. was incorporated on 24 August 2010 and went into liquidation on 3 July 2013. The company’s registered office was at Gainsborough House, 151 West George Street, Glasgow, Lanarkshire G2 2JJ and it traded from the same address.
The disqualification order was made on 26 August 2015 where Mr Drysdale is banned from being a director for nine years. The disqualification commences on 16 September 2015.
Mr Drysdale is of Dumfries and Galloway and his date of birth is 9 May 1983.
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: 19 November 2015
From: The Insolvency Service