County Armagh director agrees to disqualification

The Department for the Economy (the Department) has accepted a disqualification undertaking from the director of a company involved in a take-away food shop.

Director Disqualification Undertaking

The undertaking was received for seven years from Colin Malone (64) of Bowens Lane, Lurgan in respect of his conduct as a director of Maloney’s Diner Limited (“the company”).

The company was involved in a take-away food shop with a registered office at Unit 7 Flush Retail Park, Flush Place, Lurgan. County Armagh, BT66 7DT. The company went into Liquidation on 10 January 2020 with an estimated deficiency as regards creditors of £447,098.62. There was a total of £1 owing as Share Capital, resulting in an estimated deficiency as regards members of £447,099.62.

The Department accepted the disqualification undertaking from Colin Malone on 20 July 2023 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

1. Causing and permitting the Company to submit inaccurate VAT returns totalling £219,201 and a further sum of £54,805.35 resulting in a loss of monies properly due to the Crown from 2015/16 to 2019/20.  This represented 61% of the Company’s overall estimated deficiency in respect of VAT properly payable to the Crown. Furthermore, by submitting inaccurate VAT returns, this resulted in him discriminating against the Crown as the Company was not paying as much VAT as it should have paid and therefore had more money available to fund the continued trading of the Company. Mr Malone was personally liable for both VAT and Corporation Tax penalties totalling £45,507.84 and £8,522.25 respectively arising from causing or permitting the submission of inaccurate VAT Returns and understating the revenue within the Company;

2. Failing to learn from a previous insolvency and / or demonstrating a repeated pattern of unfit conduct.  Managing Maloney’s Diner Limited in a similar way to that of Maloney’s Diner (Partnership) by causing and permitting Maloney’s Diner Limited to retain monies totalling £274,006.35 due to the Crown as at the date of liquidation.  These actions were consistent and / or similar to those demonstrated during the liquidation of Maloney’s Diner (Partnership);

3. Failing to comply with the Companies Act 2006 in that annual accounts for the year ended 31 December 2018 were never filed;

4. Causing and permitting the Company to fail to comply with Companies Act 2006 in that the confirmation statements for the periods ending 19 December 2017 and 19 December 2018 were not filed within the prescribed periods; and

5. Failure to acknowledge his responsibilities and was negligent in his compliance with the requirements of Financial Reporting Standards and the Companies Act 2006 with respect to the preparation of accounts by not recording all legitimate sales made by diverting sales after 4pm to his daughter’s business in the negligent belief that these could be deemed a loan to his daughter’s fledgling business, and therefore filing false and misleading accounts.

The Department has accepted six Disqualification Undertakings and the Court has made four Disqualification Orders in the financial year commencing 1 April 2023.

Notes to editors: 

1. Insolvency Practitioners acting as voluntary liquidators, administrative receivers and administrators have a duty to report unfit conduct to the Insolvency Service within the Department for the Economy.

2. The aim of the Department is to bring disqualification proceedings against those directors of failed companies who have abused the privilege of limited liability status through negligence, incompetence or lack of commercial probity. The legislation contained in the Company Directors Disqualification (Northern Ireland) Order 2002 (“the 2002 Order”) is for the protection of the public and trading community but its operation should not inhibit genuine enterprise.

3. In cases where a person is subject to either a Disqualification Order made by the Court or a Disqualification Undertaking accepted by the Department, that person shall not be a director of a company, act as a receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless he has the leave of the High Court. A disqualified person cannot obtain permission to act as an Insolvency Practitioner.

4. Article 9 of the 2002 Order provides that where a director is found to be unfit he must be disqualified for a minimum period of two years, up to a maximum of fifteen years. The Courts have decided that the level of seriousness of unfit conduct can fall into three brackets with the top bracket of periods over ten years reserved for particularly serious cases, six to ten years reserved for cases which do not merit the top bracket and two to five years for cases where, although disqualification is mandatory, the case is less serious.

5. The 2002 Order also allows directors, with the agreement of the Department, to avoid the need for a court hearing by offering an acceptable Disqualification Undertaking. This has exactly the same legal effect as a Disqualification Order made by the court, and will usually include a schedule identifying the director’s unfit conduct. The consequences of breaching a Disqualification Undertaking are the same as those for breaching a Disqualification Order.

6. If anybody contravenes a Disqualification Order or breaches their Disqualification Undertaking they may be committing a criminal offence and could go to prison for up to two years or face a fine or both. Any person with information to suggest that a disqualified person has acted in contravention of this provision should contact The Insolvency Service’s Directors Disqualification Unit on 028 90 548582.

7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.

8. To keep up to date with news from the Department you can follow us on the following social media channels:

• Twitter – @Economy_NI
• Facebook – @DeptEconomyNI
• Instagram – economy_ni
• LinkedIn – Department for the Economy NI 

9. For media enquiries contact the Department for the Economy Press Office at pressoffice@economy-ni.gov.uk

10. The Executive Information Service operates an out of hours service for media enquiries only between 1800hrs and 0800hrs Monday to Friday and at weekends and public holidays. The duty press officer can be contacted on 028 9037 8110.  

Share this page