Mr Elisha Zinyama, the director of Rare Earth Metal Exchange Limited (REME), a company incorporated to provide rare earth metals to clients, has been disqualified from acting as a director for 10 years by the High Court, for the company failing to procure metals which it had agreed to purchase on behalf of its clients between September and December 2012.
The disqualification follows an investigation by the Insolvency Services London Team.
The order, on 10 June, prevents Mr Zinyama from acting as a director of a limited company for 10 years from 1 July 2015.
REME went into voluntary liquidation in December 2012 owing its clients 2,888,878 for unfulfilled orders.
Total assets available at the date of liquidation were estimated to realise approximately 110,000 and the total claims received in the liquidation stood at 3,617,702, resulting in an estimated overall shortfall of 3,507,702.
The Insolvency Service investigation found that by 17 September 2012 REME had received orders for at least 1,944,597 (1374Kg) rare earth metals but had failed to allocate stock against 783,703 (760Kg) of the orders. 303,350 (310Kg) of the orders were over 28 days from receipt and REME was in breach of its terms and conditions to clients.
At 17 September 2012 REME held 760Kg of bonded stock and 250Kg non bonded stock. The non-bonded stock was found by the liquidator to be counterfeit. REME continued to take new client orders and between 18 September 2012 and the date of liquidation took a further 880,645 from clients in respect of rare earth metal sales but failed to purchase any further stock to meet the orders.
Commenting on the disqualifications, Mark Bruce, a Chief Investigator at The Insolvency Service said:
The director in REME failed to conduct business in a manner that would facilitate the proper fulfillment of its client orders.
The Insolvency Service will always look to remove from the business community those directors who act below the standards that should be expected of them, given the circumstances of their companys trading.