The number of disqualification orders made against criminal company directors in Great Britain has jumped 83 per cent in a year, a new study shows.
Accountancy firm Moore Stephens has compiled research which shows that director disqualification orders increased year on year from 65 to 119, in 12 months to March 31 2015.
The criminal behaviour of these rogue directors included fraud and falsification of records and acting as a director while disqualified.
Moore Stephens said that the Insolvency Service, which leads investigations and takea action against miscreant directors, has seen its budget cut in recent years.
This had prompted fears that such directors could go unpunished for serious offences.
The organisation has laid off more than a third of its workforce in recent years, going from 3,200 staff to 2,000.
Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, says that while more directors are being disqualified for criminal behaviour, many believe that even more could be caught if the Insolvency Service was better funded – something that the new government should consider.
He said: “While it’s great to see more criminal directors banned from running companies, there is a definite feeling that there are still a number slipping through the net due to a lack of resources at the Insolvency Service.
“The new government should strongly consider increasing the Insolvency Service’s budget.”
“Catching serious criminal behaviour by a company director often takes painstaking investigation work, but many believe that a lack of funding and staff limits the Insolvency Service in how many of these cases it can take forward.
Willmont added: “The risk is that the Insolvency Service may be unable to commit the resources needed to effectively enforce its regulations, and a rogue director could very quickly get back to running a new company.”
By Marcel LeGouais