The government is set to take action to slam shut a loophole in insolvency rules frequently used by unscrupulous directors to escape investigation over failed companies.
Creditors have long complained that the Insolvency Service’s inability to open cases into dissolved companies has handed directors an opportunity to dodge accusations of malpractice.
It’s a sad but well-documented fact that the most unscrupulous individuals will happily try to exploit any crisis for their own gain.
So it was in spring 2020, almost as soon as the first COVID-19 lockdown kicked into gear, that there was a wave of reports of pandemic-related email and phone scams, trying on everything from fraudulent PPE sales to ‘phishing’ for personal information through bogus medical registrations.
At Safe Collections, we’ve been banging the drum on the UK’s late payment culture for years, making the case over and over again that without the stick of meaningful enforcement, there is little incentive for large companies to stop holding smaller suppliers over a barrel when it comes to payments.
Finally, it seems like the message may have gotten through to the government, although on account of the time it has taken, we can only conclude they are listening reluctantly.
It’s a billion-dollar industry that, unless you take your video gaming seriously, you might not even know exists. But the world of esports - competitive cash-prize and professional video gaming - has become big business, with live events attracting audiences of millions online and in person, not to mention highly lucrative corporate sponsorship deals.
The latest official figures detailing the number of convictions and other enforcement actions made under the Companies Act show that Insolvency Service activity is down by as much as 50% year-on-year in a number of key indicators.
The Insolvency Service publishes monthly statistics detailing the number of prosecutions, fines and winding up orders it has executed against individuals and businesses for breaching rules relating to the fit and proper running of businesses. Many of the actions are made under the terms of the Companies Act 2006, which sets out clear responsibilities for company directors and makes individuals personally liable for mismanagement of businesses leading to insolvency.
One of the most notorious incidents of cyber crime to date also stands out for the bare-faced cheek and simplicity of the methods employed. When criminals targeted Austrian aerospace firm FACC, they didn’t bother trying to hack into the company’s IT systems, bring down firewalls with a DDoS attack, or plant malware on its servers to quietly mine sensitive data.
Instead, they simply impersonated CEO Walter Stephan, sending a fake email in his name authorising a junior member of the accounts teams to send $47m to what the email claimed was the bank account of a company Mr Stephan was negotiating to buy. It wasn’t, and the thieves made off with the biggest single haul in cybercrime history.
One of the things suppliers are always advised to do before agreeing to provide any client with goods or services on account is to check their credit rating.
It’s a simple way to increase your own protection against serial defaulters and outright rip-off merchants. If a company or an individual has a good credit score, it means they haven’t got anything in their past that should give you cause for concern about their ability or intention to pay.
Here’s a debt recovery story with a twist - a sales rep sues his erstwhile employer for unpaid commission, wins, and then discovers that the business unit he worked for has been shut down mid-action, with all its assets transferred to a new legal entity.
The upshot being, a year on from being awarded his claim in court, he is yet to receive a penny.
An initial review of payment practices under the government’s Prompt Payment Code has found 17 signatories in breach of the code’s commitments.
A total of five companies - BHP Billiton, DHL, GKN Plc, John Sisk & Son Ltd and Twinings - have been kicked out of the scheme completely for non-compliance and for failing to produce an action plan for how they intend to bring their payment practices in line with the stipulations.
It can’t be too often that small suppliers find themselves in agreement with notoriously hard-nosed retail tycoon Mike Ashley, owner of the Sports Direct Group. But on the subject of troubled department store Debenhams’ recovery options, there may be some common ground.
In the past week, Debenhams has secured a £200m refinancing package to help it restructure its debts, cut operating costs and rationalise its store holdings. Mike Ashley and Sports Direct, Debenhams’ biggest shareholder, are vehemently opposed to the plan, even going so far as to write to shareholders alleging misconduct from directors in a bid to get them to block the plans.