An alcohol wholesaler has been disqualified as a director for 10 years. The Insolvency Service said Norfolk-based businessman William Geoffrey Mason traded with a “lack of commercial probity” and “abused” investors’ money.

The facts of the case

William Mason Fine Wines Limited was established in March 1997 as an alcohol wholesaler. Between 2001 and 2019, the director, William Mason, took payments from investors amounting to a value of £445,000. The company subsequently entered liquidation and was wound-up in November 2020.

The Insolvency Service then began an investigation into the company. It found that in the majority of cases, Mr Mason had not purchased wines on behalf of his investors. Where wine was purchased, it was disposed of without the agreement of the investors. The company had been drunk dry prior to liquidation and there was no wine stock.

The outcome was that several of the investors lost their investments. David Argyle, deputy head of insolvent investigations at the Insolvency Service, explained that many of the investors “were good friends with William Mason and it was this friendship that made them believe they could trust him”.

The Insolvency Service gave Mr Mason a 10-year director disqualification. This prevents him from being directly or indirectly involved in the promotion, formation or management of a company, without the permission of the court, until February 2032. Speaking about the penalty, David Argyle said:

“Ten years is a significant disqualification and sends a stark warning to directors who think they can abuse their investors that we will pursue the strictest restrictions and remove them from the corporate arena.”

Director disqualification

The Insolvency Service has the power to ban individuals from acting as a director for up to 15 years. The law states that a director should be disqualified if ‘his conduct as a director makes him unfit to be concerned in the management of a company’. Examples of unfit conduct include:

  • Fraudulent behaviour
  • Trading to the detriment of creditors because the company cannot pay its debts (known as wrongful trading)
  • Failing to keep/deliver proper company accounting records
  • Failing to prepare/file accounts and other statutory returns to Companies House
  • Not to preparing/filing company tax returns or pay tax due to HMRC
  • Using company money or assets for personal benefit
  • Continuing to take credit when there is no reasonable prospect of creditors being paid
  • Failing to co-operate with the official receiver/liquidator’s request
  • Being convicted of a criminal offence in relation to the promotion, formation, management or liquidation of a company

The disqualification of Mr Mason is not stand-alone. The Insolvency Service regularly imposes director disqualifications – and lengthy ones at that. Just weeks before, the Insolvency Service banned another business owner for 11 years. He was found to have “scammed” over £6million from investors by promising false returns on investment.

Unlike the cases described above, the ‘unfit conduct’ does not have to be deliberate for a director to be disqualified. Even if mistakes arise out of negligence or carelessness, the director of a company can still face a ban. Other penalties can also be imposed by the courts, such as a Compensation Order to repay the company’s creditors.

Have you received a Section 16 letter?

If the Insolvency Service decides that you have breached your obligations as a director, you will be sent a Section 16 letter. We suggest that you contact us at Altion Law as soon receive such a letter. We can assess your case and determine the best approach going forward. It may be preferrable to accept the charges and under into a voluntary undertaking. Or, if there has not been any wrongdoing, then it will be better to deny the allegations. If you take the latter course, we can help you gather the evidence needed to support your case.

If you would like to have a free confidential discussion with a member of our team, please either make a Free Request For Call Back or call us directly on 01908 414990 and we will be pleased to help you.