A company director has several responsibilities, one of which is to make sure that the company’s records are well maintained so as to demonstrate the inflow and outflow of the company money. However, not all directors seem to take this role that seriously. In this particular case, former director of Relay Carpets UK Ltd., Victor Ronald Bilkey, was handed a directorship ban for not providing accurate records about the company’s money. The 51-year-old man from Essex, has been disqualified from acting as a director for a period of seven years. During this rather long period, Mr. Bilkey will neither be allowed to act as a director, nor be involved in any managerial decisions for the said company.
The disqualification was decided after an investigation took place by the Insolvency Service. Back in 2013, Relay Carpets UK Limited, became insolvent. The company owed money to the HMRC. An investigation took place at that point, and there were not a sufficient amount of accounting records to justify the flow of company money. Mr. Bilkey should have maintained and preserved suitable accounting records, as these are required by the liquidator. However, he did not do so, even though this is a critical part of a director’s responsibility.
Without such accounting records, various matters remained obscured, or could not be explained well enough. For instance, the reasons behind the payments that were made from the company’s bank account, were not quite clear. There were international payments amounting to £25,000, cash withdrawals amounting to over £538k, and even over £170k which appeared to be purely for personal benefits. Moreover, in the absence of proper accounting records, there could not be a clear idea of the true level of the assets and liabilities of the company either. This also involves tax liabilities.
According to Mark Bruce, Chief Investigator with the Insolvency Service, the period of disqualification that was set in this case was a clear message that directors face the risk of being removed from their role if they are not responsible enough to maintain proper accounting records. These records should explain the transactions carried out by the business. In fact one of the main goals of the Company Directors Disqualification Act is to guarantee that company directors maintain proper standards of conduct, and when such standards are not maintained, it is crucial that measures are taken so as to raise them. This has a significant impact on the running of a firm, as well as on the actions of directors.
Mr. Bilkey, and any other director who gets such a disqualification order will not only be made to stop acting as a director, but he or she will also have to stop taking part, either directly or indirectly, in the formation or management of any other company, or act as an insolvency practitioner. In addition, such a person will not be allowed to be a receiver of a company’s property either.