Two are disqualified from acting as directors

THE HIGH COURT has disqualified a man and a woman from acting as company directors for a five-year period.

The order was granted yesterday by Mr Justice Michael Peart against Anthony Dominic Collins and Patricia O'Connell, of Ballycorus Road, Kilternan, Co Dublin, following the bringing of the disqualification proceedings by the Director of Corporate Enforcement.

Mr Collins and Ms O'Connell were directors of Anderson Kershaw Ltd (AKL) and Anderson Conforming Ltd (ACL), formerly with registered offices at Fitzwilliam Square, Dublin. Both companies have been struck off the register of companies.

The director had claimed it was clear from books and records of the company that AKL was insolvent at least by August 31st 1997, when its deficit was some €81,000 with negligible assets.

The director said that the company was grossly undercapitalised and relied on sums due to the Revenue for working capital. A judgment for some €274,000 was obtained by the Revenue against the company in July 2003.

The director also said no annual returns whatsoever were filed for ACL and he strongly criticised the respondents' decision to simply cease operating their business through AKL and for continuing to try to trade through ACL.

The respondents had said they believed their accountants were attending to the companies' affairs and that they had later encountered difficulties engaging other accountants to sort out the companies' problems.

They said they had encountered a range of other problems and rejected claims that they failed to keep proper books.

Mr Justice Peart said that officers, including directors, of a company must be taken to be aware of their statutory obligations to file annual returns for the company. They could not successfully claim they were unaware that, if returns were not filed for one or more years, the company was at least at risk of being struck off the register. The statutory requirements of the Companies Acts were not requirements devoid of real purpose, he said. They existed for the protection of creditors so that creditors could be aware of the financial status of a company with which they were having dealings.

In this case, it was not disputed that the companies had failed to comply with the requirements, and it was insufficient for the directors to say they had appointed accountants to take care of all matters for them.

The requirements for a disqualification order had been met in this case, the judge found. There were both aggravating and mitigating factors involved and, in all the circumstances, he believed that the disqualification should be for a period of five years.

The aggravating factors were at the lower end of the scale while the mitigating factors, the claim of relying on accountants and the claim that the directors genuinely tried to trade out of their difficulties, were also not weighty, he ruled.