A husband and wife team from Cheshire have been disqualified for a total of 24 years for their conduct in First Step Finance Limited.
Adrian Whitehurst, a director from 2 October 2007 to 27 July 2009 and Christine Whitehurst, who succeeded him from 24 July 2009 to 18 October 2013, have provided disqualification undertakings to the Secretary of State of 10 and 14 years respectively.
The ban means neither Mr Whitehurst, nor Mrs Whitehurst is allowed to be a director of a limited company, whether directly or indirectly, for the duration of their bans.
The company traded from Stockport and operated under the regulation of a consumer credit licence preventing utilisation by the company or its directors and providing protection from any failure of the company. First Step represented to its clients that it was complying with these requirements when in fact it was not and the directors drew significant sums from the client accounts. At the date of Mrs Whitehurst’s resignation there was deficiency of client funds of £5,943,939.
The Whitehursts withdrew money from the company in breach of the regulations and treated it as directors’ drawings. They then set off their liability for the amounts they owed the company by selling their shares in both a speculative overseas property development and the company itself at prices that could not be explained and to their own advantage.
Furthermore funds taken from client accounts were loaned to companies owned and controlled by family members but which had limited trading histories and minimal assets and resulting in the sum of £678,816 outstanding and unrecoverable from these companies when First Step went into Administration.
Following the resignation of Christine Whitehurst the former Finance Manger Darren Newton acquired the company and became its sole director. He has given a disqualification undertaking for 3 years and 6 months in respect of his allowing First Step to utilise company funds, totalling £302,500, and enter into transactions to purchase First Step’s shares for the benefit of another company of which he was a director, at a time he was aware of the deficiency on the client account and was unable to pay these sums himself.
The disqualifications, effective from 7 July 2016, prevent Mr and Mrs Whitehurst from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.
Robert Clarke, Investigations Group Leader at The Insolvency Service said: “Customers who are forced to use debt management companies are particularly vulnerable individuals which is why the sector is subject to stringent regulation.
“The actions of Mr and Mrs Whitehurst in deliberately misrepresenting the basis on which funds were held and then taking these monies to fund their lavish lifestyle are reprehensible and therefore disqualifications towards the top period allowed by law are entirely appropriate. The Insolvency Service will work with partner agencies to pursue such individuals to the full extent of the law.”