Like an out-of-control juggernaut hurtling towards the precipice with no-one at the wheel, the Grand slides towards disaster. To be fair, there was someone at the wheel, albeit briefly, but Michael Stainer (pictured), its former commander-in-chief put paid to that – or he thinks he has. What we would have given to be a fly on the wall on Tuesday (27th Nov 2018) when, we are led to believe, the Official Receiver conducted his formal interview with Mr. Stainer. Was “unfit conduct” on the agenda?
There is a long list of conduct which may lead to disqualification and bankrupts often invent new ways of breaking the law. A typical list would include:
* Conduct that seeks to deprive creditors of assets
* Continuing to trade to the detriment of creditors when a company is insolvent
* Fraudulent behaviour
* Failure to keep proper accounting records
* Failure to prepare and file accounts or make returns to Companies House
* Failure to submit tax returns and/or fairly pay the tax due
* Failure to comply with other regulatory requirements
* Failure to co-operate with the official receiver and/or insolvency practitioner.
What about any offences after bankruptcy? Let’s try these on for size:
* Authorising the signing of cheques and managing bank accounts
* Meeting with shareholders and convening shareholder meetings
* Meeting with staff and directing their activities
* Updating director information though Companies House’s on-line filing portal
The law applies not only to a person is formally a director, but to a shadow director, a person fulfilling all the activities as if he or she were a director. Sort of a general manager type of thing…….
Now, let’s be clear, this is all hypothetical…………………………. but as we wrote a few days ago, in a spirit of qualified optimism, Henry Bolton OBE (pictured) was appointed on November 8th as director of Hallam Estates Ltd, who own the freehold, and the three companies still trading. This was clearly a move welcomed by (most) residents and (most) employees, as it offered a post-Stainer vision of sensible and honest management. It might even have been a profitable vision! However imagine the shock when we, and we assume Mr Bolton, spotted that on the 21st he had ‘resigned’, and was replaced on the 19th by one Robert Graham Moss, born November 1950, address for correspondence, the Grand.
A quick call to Companies House confirmed that all of these changes were made using the online portal which requires a unique authentication code attached to a unique email address to gain access. In this case, the email address appears to be that of Michael Stainer.
* Strike 1: “You cannot be involved in forming, marketing or running a company. You could be fined or sent to prison for up to 2 years if you break the terms of the disqualification.”
* Strike 2: Acting as a director without permission: a bankrupt cannot appoint directors either directly or indirectly and must not act as a director or be involved in any way in the management of a company.
* Strike 3: Someone who knowingly assists a person to break the law in this way can also be liable to prosecution and for the debts of the company.
Management can occur even where the person’s involvement in the company’s business is limited, provided the actions in question are those that are normally carried out by a manager.
Ignoring who actually pressed the button on the Companies House portal, there is a clear procedure for removing a director. If there isn’t one in the company articles – which in the case of Hallam Estates, there isn’t, Sections 168 and 169 of the Companies Act 2006 provide a statutory procedure that enables shareholders to remove a director by ordinary resolution at a general meeting. The following steps must be taken:
* A shareholder proposes a resolution to remove a by giving ‘Special Notice’ to the company.
* The director/ directors should then call a general meeting of the shareholders to vote on the proposed resolution at least 28 days after the date of the special notice.
* Notice of the general meeting must be sent to all shareholders and the director facing removal.
* The director is entitled to make written representations prior to the general meeting. At the general meeting, the director in question may speak and make further representations.
On the understanding that Mr Bolton did not resign, what process was undertaken? Under whose control? Who pulled the strings? We ask this question, not because we don’t know the answers, but because we do, and we’re pretty sure someone else is asking as well!
Meanwhile, as if this all wasn’t enough, another Court yet again condemns the conduct of Michael and Doris Stainer (pictured). Here’s a selection of choice phrases:
“Unreasonable”, “vexatious”, “designed to harass”, “part of a deliberate course of conduct spanning over many years.”
These words were used in a Tribunal decision awarding costs against them in an action which sought to recover over £165,000 of unpaid service charges on their 19 flats. And who could forget the £10K he owes to Folkestone & Hythe District Council for Business Rates
In a Tribunal hearing, costs are only awarded if the conduct of either party is deemed “unreasonable”. The threshold for this is pretty high, but like Olympic high jumpers, the Stainers sailed over the bar and the applicants secured over £27,000 to replenish their cash-starved service charge fund.
Nonetheless, the Stainers appealed…………………… and lost, as the judgement shows.
Sadly for the residents of the Grand, the Stainers are bust so they are unlikely to get much back, if anything, once HMRC are finished. But at least what little is left of the Stainer mystique is smashed to smithereens.
Meanwhile investigations continue into possible misconduct and into where the revenues that poured in one door ended up. Certainly not into the building that housed Stainer’s enterprises.
As a final footnote, Michael Stainer can no longer describe himself as a ‘chartered accountant’ as he was removed from the register of the ICAEW – the professional body who certify “chartered” accountants, because of his bankruptcy.
The Shepwayvox Team – Dissent is NOT a Crime.