Friday, 31 May 2013

UK: Scotland: director disqualified following abdication of responsibility

Lord Malcolm, in the Court of Session (Outer House), gave his opinion today in HM Secretary of State For Business, Innovation and Skills, Re A DISQ Order in Terms of the Companies Directors Disqualification [2013] CSOH 86. He held that a director should be disqualified from acting as such for a period of two years and rejected the argument that her conduct, which was not dishonest, was insufficient to justify disqualification. The director had, over a period of 18 years, left the management of the company's affairs to her husband and had failed to discharge her responsibilities. Lord Malcolm stated (paras. [17] and [19]): "If someone accepts a directorship and then abdicates all responsibility for the affairs of the company, on any common sense view they have demonstrated unfitness for the office to a high degree ... The public interest demands that directors of companies take an active interest in the affairs of the company, and are mindful of their personal responsibilities for the proper running of the business".

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