| ICC Credit is concerned that rogue directors have been given a green light following government cuts to the Insolvency Services enforcement budget. The cuts amount to £3.3 million – meaning that 500 rogue directors per year could escape detection.
1,173 directors were disqualified in 2005-06. With Alistair Darling’s instruction to only pursue the most serious cases, it is estimated that up to half of these would have gotten away.
The key offence, from which directors can now escape, is ‘trading whilst insolvent’. ICC Credit believes that this is bad news for the credit management industry.
Darren Spratt, Managing Director of ICC Credit, said ‘with these savage cuts, it has become vital for Credit Managers to check out company linkages. Knowing who heads up the business and what type of corporate track record they have will help to mitigate against the impact of the loss of this resource.’
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