A director of a company who failed to cooperate with the Financial Services Regulator and (although the company was not insolvent) with the Official Receiver recently found that an order was made banning him from acting as a director.
Mr Ghassemian was a company director and ignored requests for information from the Financial Services Regulator and also the Official Receiver. When an order banning him from being a director was made by the Secretary of State, he argued that the order was invalid because the Secretary of State had no jurisdiction to make a complaint on behalf of the Financial Services Regulator and, also, that the allegation regarding non-cooperation with the Official Receiver was irrelevant since his company was not insolvent.
The High Court dismissed his appeal. Failing to cooperate with the appropriate regulators could be sufficient grounds to show unfitness to be a company director.
This case illustrates the fact that the authorities take a dim view of directors who fail to cooperate with them when they make enquiries. Company directors who receive requests from regulators and have any qualms about complying with them should ensure that they take advice regarding what level of cooperation needs to be given. |
