Business recovery professionals are concerned the ‘unfortunate and innocent’ will be caught by measures to speed up the disqualification of rogue directors in the new Insolvency Act.
The Department of Trade and Industry announced last week that fast-track powers, and other changes to the current insolvency practices, would come into effect at the beginning of next month.
The new powers, set out in the Insolvency Act 2000, will allow courts to remove directors immediately if their conduct is deemed unfit.
Responding to the announcement, Stephen Gale, president of insolvency group R3, said he believed the government had missed the boat with the new act, as it had not fully addressed key issues.
He said the group welcomed the fast-track powers ‘to the extent that they should see an increase in disqualifications of culpable directors’.
But he added: ‘We are greatly concerned that the DTI may be tempted to concentrate resources on the unfortunate and ignorant, rather than the true rogues who are likely to dispute disqualification proceedings for as long as they can, in the hope that the DTI will abandon its efforts.’
Other provisions brought into effect include changes to bankruptcy estate fund laws, and a restriction in the use of information in criminal proceedings.
R3’s website is at www.r3.org.uk
For more on the Insolvency Act 2000 visit: www.accountancyage.com/Business/1118754.
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