At a hearing in Hamilton Sheriff Court on 27 July 2016, the Sheriff made a 12 year order against Mr Downey, which disqualifies him from being a company director from 11 August.
The effect of the order is that Mr Downey cannot, except with permission of the court, be the director of a company or take part in the promotion, formation or management of a limited company.
On 25 July 2014, Tubular Scaffolding Limited, with liabilities to creditors of £506,937 was placed into compulsory liquidation following a winding up petition lodged by HM Revenue & Customs.
Following the Liquidator’s appointment, the investigation found Mr Downey, the sole director and shareholder of the Tubular Scaffolding Limited from 1 August 2012, used the company, which was originally incorporated in 1932 and had an excellent credit rating, as a vehicle to commit a fraud against suppliers.
Mr Downey accomplished the fraud through the submission of false and inaccurate information within loan and credit applications to unsuspecting suppliers in the knowledge that the company’s established credit history would result in the applications not being subjected to scrutiny.
Mr Downey’s fraudulent actions, in a 4 month period, resulted in a loss to suppliers in the sum of £264,497.
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
The disqualification of Mr Downey sends out a clear message that where a corporate vehicle is being used to facilitate actual or potential fraudulent activity action will be taken to remove the directors from the business environment for a lengthy period of time.
Notes to editors
John Irvin Downey is of Glasgow and his date of birth is 26 June 1979.
Tubular Scaffolding Limited (CRO No. SC017003), went into compulsory liquidation on 25 July 2014 with a deficiency to creditors of £506,937. The company was incorporated on 12 October 1932 and operated a long established business with its principal activities as scaffolding hire and other related services.
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.
Media enquiries for this press release – 020 7674 6910 or 020 7596 6187
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