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Haulage near the top of the league for rogue directors
Page 4
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• by Guy Sheppard and Lucia Cockroft Road transport has one of the worst records across industry for dodgy directors, latest government figures reveal.
Of the 935 bosses banned from running a business between March-September of 2001, 55(6%) worked in haulage. That was beaten only by the construction and demolition sector with 103 disqualifications (11% of the total).
The Department of Trade & Industry (DTI) says a new "fast track" disqualification procedure helped boost figures across all sectors by nearly 25% compared with March-September of 2000.
Under this system bankrupt directors can avoid the need for expensive and lengthy court hearings by giving an undertaking to the DTI's Insolvency Service not to act as a director for an agreed period between two and 15 years. Breaking this promise constitutes a criminal offence.
Karen Dee, policy director of the Road Haulage Association, warns there is no evidence of any decline in the number of phoenix haulage companies, where bankrupts start up under a different name. She argues that although the measures are in place to deal with rogue directors, they are not being properly enforced: You can see why the DTI targets bigger companies, but hauliers don't tend to have turnovers of more than £3m. If it wants to get the ones that close down on Friday and start again on Monday. it needs to pay more attention to enforcement right across the board,."
These problems with the system were highlighted last year with the trial of freight forwarder Jeffrey Lewis. Before he was finally brought to justice he ran eight different firms with his son Michael and accumulated thousands of pounds of debt with hauliers (CM 6-12 Dec 2001). He was eventually jailed for 42 months and banned from being a director for 12 years.
But Geoff Dossetter, Freight Transport Association head of external affairs, cautions: "It can be entirely legitimate to establish a new company after the demise of an old one. There are, for sure, crooks operating in the industry, but there are also any number of such cases where operators are acting entirely legally. The bottom line is watch who you do business with."
• The DTI hotline is on 0845 6013546.