Ian Stanley Morton, the Director of One Source UK Limited, has been disqualified as a director for 8 years after the County Court at Warrington made an order against him for failing to ensure that accounting records sufficient to fully explain the stock transactions of the company were maintained, preserved, and/or delivered up to the Liquidator.
The order, made on 16 November 2015, is effective from 7 December 2015.
There relevant period for which records are not available is 1 November 2012 to the date of the companys liquidation, 21 March 2013.
The available accounting records of the company showed that, during the period, stock with a value of 143,039 was delivered to the company, whilst the companys bank statements recorded trading income over the same period of 71,174.
A number of creditors had claimed Retention of Title on the stock supplied to the company, with a value of 79,563, however, Mr Morton failed to co-operate with the Liquidator in assisting these creditors in recovering such stock from the company, and has also failed to provide explanations as to how the stock was disposed of, or accounted for the income generated from any sales of such stock or whether it was sold at a fair market value.
One of the main purposes of retention of title clauses are to ensure that where goods are supplied on credit, if the buyer subsequently goes into liquidation, the seller can repossess the goods.
Mr Morton also failed to explain why the company ordered stock with a value of 37,998 which did not appear to be in the normal course of business, or why such stock was not present at the companys trading premises at the date of Liquidation.
Commenting on the disqualification, Robert Clarke, Head of Company Investigations at the Insolvency Service, said:
Keeping proper records is a pivotal duty for directors and there is no place in the business environment for those who neglect their responsibilities in this area and thereby cover up the activities of the companies they manage.
The lack of records in this case made it impossible to determine the movement of stock and whether there was other, more serious, misconduct at One Source and that is reflected in the lengthy period of disqualification.