OUTER HOUSE, COURT OF SESSION
[2013] CSOH 98
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P280/13
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OPINION OF LORD HODGE
in the petition of
HER MAJESTY'S SECRETARY OF STATE FOR BUSINESS INNOVATION & SKILLS
Petitioner;
against
SAQIB DIN
Respondent:
FOR A DISQUALIFICATION ORDER UNDER THE COMPANY DIRECTORS DISQUALIFICATION ACT 1986 __________
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Petitioner: Duthie; Shepherd & Wedderburn LLP
30 April 2013
[2] It
is established, first, that the respondent was the Director of STH Commodities
Ltd when it went into insolvent liquidation on 5 April 2011. It is also
established that Mr Din was the director of the company throughout its
trading life and took an active part in its management. He was the sole
shareholder and was in effect the principal of the company. Thirdly, I am
satisfied that his conduct makes him unfit to be concerned with the management
of the company. The issue therefore is the period of disqualification.
[3] Having
considered Mr Duthie's submissions together with the petition, the productions
and the cases, to which I will refer, I am satisfied that the Secretary of
State is justified in the submission that this case falls in the middle of
middle bracket of periods of disqualification set out in Re Sevenoaks
Stationers (Retail) Ltd [1991] Ch 164. In particular, I consider that
the following matters point towards that conclusion. First, there have been,
throughout the life of the company, repeated breaches of duty under sections 386,
384 and 394 of the Companies Act 2006 to prepare and keep adequate
accounting records. Secondly, there is evidence of substantial bank
transactions, including the payment of large sums to the respondent, which
cannot be reconciled with the accounts which the company had lodged with the Registrar
of Companies. Thirdly, there is evidence of the deliberate destruction by the
respondent of the company's accounting records by burning them. Fourthly,
there was a clear breach of his statutory duty through his complete failure to
co-operate with the liquidator, contrary to section 235 of the Insolvency
Act 1986.
[4] As
a result of the respondent's failures and misconduct, the liquidator cannot
ascertain the purpose or regularity of many of the substantial transactions
involving the company's bank account. The purpose of payments and the
propriety of the withdrawals of large sums in favour of the respondent remain a
mystery. Nor can it be estimated what are the appropriate sums to be paid to
HM Revenue & Customs in respect of VAT and income tax. It appears, as Mr
Duthie recognised, that the shortfall to creditors in the winding up is not
large (£18,978). But, as he submitted, the true extent of the company's
liabilities including the sums due to HM Revenue & Customs, will never be
known.
[5] These
factors lead me to the conclusion that Mr Din has systematically abused
the privilege of trading with limited liability by his failure to comply with
the statutory and other duties which accompany that privilege.
[6] In
support of his submission Mr Duthie referred me to Mithani, Directors'
Disqualification Vol.1, paragraphs 1494 and 1538, Re Brooks Trnasport
Ltd [1993] BCC 766, Official Receiver v Hubbard 26 June 2007
(unreported but summarised in (2008) 323 Disqualification Newsletter (May)) and
Secretary of State for Business Innovation & Skills v Malcolm Kirkcaldy
Sheriff Court 6 April 2011, Sheriff Braid (unreported).
[7] In
the circumstances I am satisfied that it is appropriate to order the
disqualification of the respondent for a period of 8 years.