Dodgy directors will slip through the net, warns IPC

The body made the call in its annual report, hoping to force a U-turn after
Westminster scaled back the money available for the Insolvency Service to comb
through the reports produced by insolvency practitioners on the conduct of the
directors of collapsed companies.

‘The deterrent effect of the
Directors Disqualification Act
depends on directors believing that any
misconduct will be investigated and, where appropriate, penalised and on the
commitment and thoroughness of the IPs, in writing their reports on the conduct
of directors’ of insolvent businesses,’ the
IPC said.

‘The effectiveness of the system could easily deteriorate if the perception
develops among directors and IPs that there is a significant chance that the
latter’s reports will not be followed up.’

The IPC also made calls for the Insolvency Service and the regulators to
raise the bar in the individual voluntary arrangements marketplace by publishing
annual statistics laying out the completion and failure rates of IVAs set up in
each of the previous five years.

The body also recommended publishing equivalent numbers for each IP and the
firms that they work for.

‘The IPC plans to continue to follow up these recommendations during 2008
through discussions with all the relevant organisations,’
it added.

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