R3 Wrong to Blame Cable’s Insolvency Service for Fall in Company Director Disqualifications
The UK’s leading professional association for insolvency and business recovery specialists, R3, claims dodgy company directors are escaping punishment because the Insolvency Service (IS) is more concerned with meeting targets than launching complex investigations.
According to R3, while the number of reports alleging director misconduct has doubled since 2003, during the same period there’s been a 20% reduction in the number of directors disqualified as a result of an IS investigation.
R3 accuse the IS of focusing on simple and routine cases, but I think the criticism is undeserved.
There’s been a recession, which helps to explain the increase in the number of insolvency practitioners reporting director misconduct; there’s a knock-on effect.
Moreover, other than allegations of wrongdoing, there are additional factors the IS must navigate before disqualifying a director.
The organisation is an under-funded executive agency of the Vince Cable-led Department for Business Innovation and Skills, which has been subject to severe cutbacks.
Even if they wanted to, the IS cannot follow up every case of misconduct with an investigation; it would be far too expensive.
The overriding decision on whether the IS follows-up a report of wrongdoing has to be a commercial one as the organisation has a limited budget; therefore only extreme cases will be subject to further investigation.
The IS doesn’t have an endless pot of money to commit to an infinite amount of investigations and prosecutions, and R3 should know this already so their assessment is more than a little baffling.
R3 must remember that investigations are labour and capital intensive, and the IS has to be mindful of how they commit taxpayers’ funds, particularly in such austere times.
Debt Relief Order vs. Bankruptcy: Which Is Right for You?
If you’re struggling with overwhelming debt, you’ve likely heard of a Debt Relief Order (DRO) and bankruptcy as potential solutions. But which option is right…
Read MoreWhat Is a Bankruptcy Restrictions Order (BRO)?
When you declare bankruptcy, you enter a 12-month period as an “active bankrupt,” during which you must adhere to a set of restrictions. If you…
Read MoreKingsway Square Limited (In Administration)
Did you purchase an off-plan property with Kingsway Square Limited (In Administration) which has not been developed? Would you like your deposit returned? Are you…
Read MoreGibraltar Financial Services Commission (GFSC) – Did they fail Loan Note Holders?
As a loan note holder, you may have placed your trust in regulatory bodies such as the Gibraltar Financial Services Commission (GFSC) to safeguard your…
Read More