Phoenix directors face jail and house seizures
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• From next year company directors who deliberately go bust leaving hapless creditors and employees in the lurch, only to start up again, face property seizures and imprisonment.
So-called "phoenix directors" are the scourge of the haulage industry, often establishing freight forwarding companies for quick profits at the expense of their suppliers and subcontractors. They then disappear leaving huge debts behind them, only to set up again under a different name.
13ut under new Government proposals, which are bound to delight the thousands of hauliers who have been stung in these phoenix rackets. directors found guilty could face up to seven years in jail, and the seizure of their homes and personal possessions.
However, the proceeds of these repossessions will not go towards reimbursing the victims. Instead they will be set off against unpaid national insurance debts and associated interest at the Contributions Agency.
Creditors will still have to fight for their money through the courts.
Social Security Minister John Denham says: "Phoenix directors need to be tackled. Employees lose out, the Treasury loses out and legitimate companies face unfair competition."
Legislation should be in place by April 1999.
.=.! The Department of Trade and Industry has set up a 24hour Disqualification Hotline (0845 6013546) for people to "name and shame" anyone who runs a company while disqualified from being a director.
This will allow disqualification orders to be enforced.
0 The Public Interest Disclosure Bill has passed its second reading in the House of Commons. It is designed to protect "whistleblowing" employees who report misconduct in the workplace including breaches of civil law, fraud, health, safety or environmental negligence, and concealing information.
Workers will he required to act in good faith and must attempt to put their concerns to the employer before blowing the whistle. Contact the Whistleblowers' Hotline on 0171 215 5000.