Julian East, director of two connected companies Orange Angel Ltd and Orange People Solution Group, has been disqualified from acting as a director for six years for filing inaccurate financial accounts. The disqualification follows an investigation by The Insolvency Service.
Mr East, 43, of Charminster, Bournemouth has given an undertaking to the Secretary of State for Business, Innovation and Skills that he will not act as a director of a limited company from 27 February 2013 to 2019.
Both companies were recruitment agencies based in the City of London but Orange Angel Ltd (OAL) also traded as a property development business.
Mr East allowed accounts for Orange Angel Ltd (OAL) to be filed at Companies House that exaggerated the financial health of the company. The errors included:
Turnover inflated by 4,214,304;
Net after tax profit inflated by 396,319; and
Balance on its capital reserve inflated by 308,119.
The investigation into Mr Easts conduct as director of his other company Orange People Solution Group (OPSG) found that he put himself ahead of the companys other creditors, in breach of his duty as a director.
On 7 April 2010, Mr East authorised a transfer of 62,793 from the companys bank account to his personal bank account in settlement of his directors loan instead of paying off more than 370,000 in unpaid taxes.
When OPSG entered administration on 9 August 2010, there was a total of 951,068 in claims from unsecured creditors on its books.
Mark Bruce, a Chief Examiner at The Insolvency Service said:
Directors of all companies, especially of those experiencing financial difficulties, have a duty to act in the best interests of creditors. Arranging repayment of their own personal loans ahead of others is a clear disregard of this duty; as is filing inaccurate information about their companys financial position, since creditors trust these reports.
Creditor confidence in the viability of a company is vital for the smooth flow of business transactions that support economic growth. Directors who disregard their obligations to their creditors are toxic to the business environment and the Insolvency Service will use its powers to remove them from it.