Husband and wife team sanctioned after moving money from insolvent company

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Two directors have been banned from running a business after an investigation found they had moved assets from their insolvent company.

The husband and wife partnership took over finance company Kevin Neal Associates Limited in April 2011.

A deed poll and declaration was signed, meaning the partners’ parent company became liable, amongst other liabilities, for any award of the Financial Ombudsman Service against Kevin Neal Associates Limited.

However, by May 2014, “at least six decisions” by the Financial Ombudsman Service, totalling “at least £573,274”, had gone against the company. The company’s previous insurer refused to settle these claims.

The parent company was ordered by the FCA to not transfer away assets without its permission. But despite this order, an investigation found that the parent company had moved around £55,000 and two cars worth £22,120 to associates parties.

The Insolvency Service, conducting the investigation, said these transactions “were to the unreasonable risk and ultimate detriment of other creditors who either submitted claims in the liquidation of Kevin Neal Associates Limited or were included within the Statement of Affairs.”

Mark Bruce, Chief Investigator for the Insolvency Service, said: “This is a particularly blatant example of common misconduct seen by the Insolvency Service.

“Mr and Mrs Neal plainly acted to improve their position, once the partnership was insolvent, while failing to honour either the prior decisions of the Financial Ombudsman or the protections put in by the FCA, specifically to stop such actions.

“Such conduct will invariably lead to disqualification.”

 

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