Crackdown on dodgy directors revealed
Disqualifications against directors increased to 1,437 in the year to March 31 2011, from 1,388 during the previous 12 months, according to figures from the Insolvency Service.City law firm Reynolds Porter Chamberlain (RPC) said the numbers show a 23 per cent rise in disqualifications compared to five years ago when just 1,173 orders were made. A total of 6,422 directors have been disqualified in the past five years.
Jonathan Davies, partner at RPC, said: “Disqualification orders can have a long-lasting impact on the director’s ability to set up a new business – it is undoubtedly career threatening for directors.”
RPC said that the rise in disqualification orders could be a result of the deluge of company failures in the recession: the official Insolvency Service statistics show company insolvencies reached a peak in the third quarter of 2009 at 5,055.
Davies added: “Liquidators and administrators look for someone to blame when there is an insolvency and they have been focusing on company directors. With so many insolvencies during the recession, the government has been very busy in applying to the courts this year for disqualification orders.”
According to the Insolvency Service accounts for 2010 to 2011, 4,852 complaints about directors’ conduct were sent to the government agency.
A total of 166 defendants were convicted between March 2010 and March 2011 as a result of corporate and personal insolvency-related offences.