Mr Keith Joseph was the sole director of a property company that developed a complex of flats and a commercial premises in Hertfordshire.
He has been disqualified from acting as a company director for a period of eight years following an investigation by The Insolvency Service’s Company Investigation (North) directorate based in Leeds.
Mr Joseph, 57 has given an undertaking to the Secretary of State for Business, Innovation and Skills that he would not act as a director of a limited company for a period of eight years with effect from 15 August 2012.
The company of which he was a director, Joseph Hale Holdings Ltd, developed a site in Knebworth, Hertfordshire providing sheltered housing units aimed at the over 55s. The investigation showed that in October 2010 two properties were sold for a combined purchase price of over £500,000. The majority of these funds should have been used to reduce the company’s borrowings secured on the complex. However, the director, Keith Joseph of St Albans, Hertfordshire arranged for these funds to be paid into an account with a different banking group.
After discovering that these funds had been diverted, the company’s secured charge holder applied to place the company into administration on 21st December 2010.
As a result of the secured charge holder not receiving the sale proceeds, the bank refused to provide the purchasers of the flats with the necessary legal documents. This prevented them being able to register their legal title to the properties until September 2011, some 11 months after the purchase, when insurers repaid the bank.
Claire Entwistle, Director of Company Investigations (North), said:
“The director of this company failed to adhere to the basic requirements of legal agreements, namely a mortgage and debenture, that required substantial sale proceeds were used to reduce the company’s bank borrowing. As a direct result two purchasers suffered significant delay in being able to register their legal title to the properties.
The public can be assured that The Insolvency Service will always seek to take robust action against such directors so their ability to hide behind the protection of limited liability is removed.”