Richard Price and Timothy Porter, both directors of Recruit Investments Limited, which headed up a group of businesses specialising in labour recruitment, have been banned from being company directors for 6 years and 5 years respectively for transferring company assets for no consideration, including Arabian horses and money to one of the directors and parties unconnected with the company.
The insolvency Service investigation, which led to the disqualifications, uncovered that Mr Price and Mr Porter:
- transferred company assets with a value of £242,640, which included a number of Arabian horses, to parties unconnected with the company for no consideration in return
- paid £165,541 of company money to Mr Price and/or unconnected parties without due regard to the interests of the company’s creditors, who were largely left unpaid. The funds were withdrawn and the assets transferred at a time when Mr Price and Mr Porter were, or ought to have been, aware that the company was insolvent and unable to pay its debts as and when they fell due.
Recruit entered liquidation on 12 November 2013 with a deficiency of £2,656,328. Mr Price and Mr Porter gave undertakings to the Secretary of State for Business, Innovation and Skills on 19 August 2015 and 08 August 2015 respectively which prevents them from being directly or indirectly becoming involved in the promotion formation or management of a company until 22 September 2021 and 31 August 2020 respectively.
Jane Knight, Senior Investigator, Insolvent Investigations – Midlands and West said:
The Insolvency Service will rigorously pursue company directors who seek to benefit themselves ahead of their creditors by extracting company funds when others are not being paid.
Limited liability protection is only available to those who comply with their obligations as company directors. If those obligations are ignored, that protection will be withdrawn.
Notes to editors
Mr Price’s date of birth is 1 March 1953 and he resides in Norfolk. Mr Porter’s date of birth is 18 November 1967 and he also resides in Norfolk.
Recruit Investments Limited (CRO No. 07313826) was incorporated on 14 July 2010 and latterly traded from Clarence House, 6 Clarence Street, Norwich NR1 1HH. Recruit was formed as a holding company to own different businesses.
Mr Price was a director from 14 July 2010 to the date of liquidation and Mr Porter was a director from 12 June 2011 to the date of liquidation. The Company went into Liquidation on 12 November 2013 with an estimated deficiency of £2,656,328.
On 01 September 2015, the Secretary of State accepted a Disqualification Undertaking from Richard Price, effective from 22 September 2015, for a period of 6 years. The matters of unfitness, which Mr Price did not dispute in the Disqualification Undertaking, were that:
From June 2012 at the latest I breached my fiduciary duty to Recruit Investments Limited (“Recruit”) by withdrawing funds amounting to £165,541 and transferring assets with a value of £242,640 for no consideration from Recruit for the benefit of myself and or unconnected third parties. The funds were withdrawn and the assets transferred without due regard to the interests of and at unreasonable risk to Recruit’s creditors, in particular a subsidiary company and its former owners. The funds were withdrawn and the assets transferred at a time when I was or ought to have been aware that Recruit was insolvent and unable to pay its debts as and when they fell due.
On 10 August 2015, the Secretary of State accepted a Disqualification Undertaking from Timothy Porter, effective from 31 August 2015, for a period of 5 years. The matters of unfitness, which Mr Porter did not dispute in the Disqualification Undertaking, were that:
Between July 2012 and February 2013 I breached my fiduciary duty to Recruit Investments Limited (“Recruit”) by allowing my co-director to withdraw funds amounting to £165,541 and transferring assets with a value of £242,640 from Recruit for the benefit of my co-director and or an unconnected third party. The funds were withdrawn and the assets removed without due regard to the interests of and at unreasonable risk to Recruit’s creditors, in particular a subsidiary company and its former owners. The funds were withdrawn and the assets transferred at a time when I was or ought to have been aware that Recruit was insolvent and unable to pay its debts as and when they fell due.
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: 30 September 2015
From: The Insolvency Service