Two recent cases have highlighted directors who were disqualified and banned from being company directors and from being involved in the management of a limited company in any way.
The first was for 12 years for selling rare earth elements as an investment and failing to maintain proper records, the second was for six years after allowing the company to employ three illegal workers.
In the first case the investigation found the price of the rare earth elements (REEs) had been inflated by several hundred percent so that the only entities to make money from the venture were the company and its supplier of REEs. It was uncovered that the company telephoned individuals and sold them REEs on the basis that they were suitable as an investment. There was no viable exit strategy for the company’s customers at the time and, even if there had been, the price charged for the REEs meant that the REEs could not be sold without financial loss. As a result customers are owed at least £33,414.61.
In the second case the company failed to comply with immigration law resulting in the employment of three illegal workers. Following a visit from Home Office immigration officers on 11 June 2014, during which this breach was discovered, the company was fined a penalty of £30,000 by Home Office Immigration and Enforcement (HOIE). The company raised objections but these were rejected by HOIE and the fine remained in place. The company ceased trading.
Article from ACCA In Practice