Action on phoenix firms
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by Karen Miles • A Government initiative to help reduce the number of "phoenix" directors who repeatedly rip off creditors has received a cautious welcome from haulage groups and small business representatives.
Both the Road Haulage Association and the Federation of Small Businesses welcome the announcement from the new Government but say there must be new legislation before meaningful action can be taken against these directors.
Competition and Consumer Affairs Minister Nigel Griffiths says that over the next year directors who close their business owing money to creditors and then set up another will be subject to "even greater scrutiny".
This will involve the Department of Trade and Industry's executive agency, the Insolvency Service, looking harder into files of suspect directors who have failed in one company and go on to set up another.
But Road Haulage Association northern regional director Geoff Dunning says hauliers need new laws which would make it easier to prove a director was knowingly trading while insolvent.
Official receivers could also be given more powers to investigate company failures, Dunning suggests.
The DTI has combined its announcement with figures showing last year's rise in disqualified company directors and information on a "notable" case involving Scottish haulier George Barclay.
In January Barclay was disqualified for 10 years by Paisley Sheriff's Court after his furniture removal operation, JRB Removals Ltd, was wound up in September 1993 with estimated debts amounting to £217,000.
Previously he had been a director of George Barclay (Moving Systems) Ltd, which was wound up in 1990 with estimated debts of 4101,000.
Last year more than 1,000 directors were banned—a quarter of all those banned since the relevant legislation was introduced in 1986.