Insolvency Service steps up hunt for ‘rogue’ directors
The Insolvency Service is increasingly using ‘public interest’ disqualification orders to remove potentially rogue directors from their positions before they can do more harm, with a 600% increase in a year, according to analysis by Moore Stephens
14 Nov 2017
The firm says data from the Insolvency Service show that the number of ‘public interest’ disqualifications have increased from four in 2015/16 to 28 in 16/17. It predicts this type of disqualification is on course to grow even more over the next year, after 20 of these Section 8 disqualifications were procured in the first six months of the year.
The government describes Section 8 orders as being aimed at ‘rogue’ directors who can do harm to the wider economy. The Insolvency Service estimates that it has prevented losses of £92m in 2016/17 as a result of their director disqualification work, saving creditors around £114,000 for each director disqualified.
Mike Finch, restructuring and insolvency partner at Moore Stephens, said: ‘Suspect directors are bad for businesses as a whole as well as giving their entire sector a bad name. It is good that the Insolvency Service is looking to clear them out.
‘The fact the number of public interest disqualifications is continuing to rise should give creditors and consumers more confidence that unfit directors are being removed from the system.’
Report by Pat Sweet