Co Armagh directors accept disqualifications over financial conduct

by
Micheal McKenna
December 10, 2014

A number of Co Armagh directors have agreed to disqualification undertakings, the Department of Enterprise, Trade and Investment has confirmed today.

One relates to the financial activities of a property development company and the other an agricultural machinery company.

In the case of the property company, the disqualification undertaking for 11 years was received from Philip Wright (46) of Langtry Lodge, Moira.

It was in respect of his conduct as a director of Philip Wright Developments Limited.

The company carried on the business of property development and sale, entering administration on 28 October 2010 with estimated total assets available for creditors of nil, liabilities to secured creditors of £2,449,572, liabilities to unsecured creditors of £224,910, and an estimated deficiency as regards creditors of £2,674,482.

After taking into account the losses incurred by members (the shareholders) of the company the estimated total deficiency was £2,674,483.

The matters of unfit conduct alleged by the Department of Enterprise, Trade and Investment in relation to Philip Wright in respect of his conduct as a director of the company and accepted by the court were:

· Misleading a creditor as to the extent of the company’s property portfolio in order to obtain finance and in so doing misleading the creditor as to the company’s true financial position and therefore its ability to honour the significant liabilities to the creditor;

· Providing false and misleading information to the Administrator, thereby causing the incursion of further costs in the administration of the Company to the further detriment of the secured creditor;

· Causing and permitting the company to file false and misleading accounts in Companies House and, in doing so, disguising the true extent of the company’s insolvency;

· Attempting to defraud the secured creditor by causing and permitting the company to offer up invalid security and misleading the creditor as to the extent of the company’s property portfolio;

· Causing and permitting the transfer of land owned by the company at a material undervalue to the detriment of the secured creditor.

In respect of the agricultural machinery company, and in a separate matter, two County Tyrone men and another from Markethill in County Armagh agreed to disqualification.

The undertakings for six years were received from Peter Johnston (36) of Modagh Road, Beragh, Sixmilecross, Wesley Johnston (29), of Green Park Drive, Markethill, and Ian Johnston (59) of Tullyneil Road, Sixmilecross, in respect of their conduct as directors of Mixtec Engineering Limited.

The company carried on the business of the design and manufacture of agricultural machinery from Tullyneil Road, Sixmilecross, Co Tyrone and entered administration on 20 June 2012 with estimated total assets available for secured creditors of £94,000, assets available for floating charge holders of £24,193, liabilities to secured and floating charge holders of £361,000, liabilities to unsecured creditors of £580,252, and an estimated deficiency as regards creditors of £823,059.

After taking into account the losses incurred by members (the shareholders) of the company the estimated total deficiency was £823,159.

The Department accepted the disqualification undertakings from Peter Johnston on 11 November 2014 and from both Wesley Johnston and Ian Johnston on 25 November 2014, based on the following unfit conduct which, solely for the purposes of the disqualification, procedure was not disputed:

· Causing and permitting the company to fail to pay over £391,422 properly due to the Crown and operating a policy of discrimination against the Crown. This consisted of £50,935 of PAYE due between April 2009 and April 2013, £99,402 of NIC due between April 2009 and April 2013 and £241,085 of VAT due between April 2008 and April 2013.

· Causing and permitting the company to misuse an account with HSBC Bank in that they caused and permitted the company to tender cheques with a value of £115,264 between June 2011 and June 2012 and standing orders/direct debits with a value of £17,830 between October 2011 and June 2012 without due regard to their being honoured upon presentation and also causing and permitting the misuse of banking facilities;

· Causing and permitting the company to enter into transactions / dispose of company assets for the sum of £12,298, which was at an undervalue;

· Causing and permitting the company to fail to file Annual Accounts with Companies House within the prescribed period for the period ended 31 March 2011; and

· Causing and permitting the company to fail to file Annual Returns with Companies House for the periods ended 14 February 2004, 14 February 2005, 14 February 2006 and 14 February 2010 within the prescribed periods.

The Department has accepted 46 disqualification undertakings and the Court has made nine orders disqualifying directors in the financial year commencing April 1, 2014.