A former Director of Extra Energy Supply has been banned from running a business for six years.
Mordechay Ben-Moshe, 48, was a Director of Birmingham-based Extra Energy Supply, which supplied around 130,000 household and business customers at the point it went into administration in December 2018.
Extra Energy Supply was under investigation already
At the time of its collapse, Extra Energy Supply was under investigation by energy regulator Ofgem for alleged breaches of its regulations. Ofgem was concerned some customers were being surprised with huge bills and evidence suggested that quarterly and final bills were not issued, and complaints from customers were also not being handled in a timely manner.
In addition, the firm owed £28.5m illionto Ofgem’s Renewables Obligation and Feed-in Tariff schemes, which incentivise the generation and use of renewable electricity. These were obligations which Extra Energy Supply failed to meet.
Extra Energy Supply went into administration before Ofgem could complete its investigation however, but the subsequent investigation by the Insolvency Service, which worked closely with Ofgem, found that Ben-Moshe breached his duty as a director of the company by failing to ensure that it complied with the regulations.
Insolvency service launched insolvency proceedings
The Insolvency Service launched disqualification proceedings against Ben-Moshe in December 2021 and in November 2022 a trial was set for November 2023. Shortly prior to this Ben-Moshe offered a disqualification undertaking, which is equivalent to a disqualification order but does not involve court proceedings.
Elizabeth Pigney, Chief Investigator for the Insolvency Service, said “Mordechay Ben-Moshe’s disregard for energy market rules and regulations caused distress to customers who were left with bills they couldn’t afford to pay. Some were left without answers due to a complaints handling service that wasn’t fit for purpose, which only added to their stress.”
“This is not acceptable behaviour for any company director and as a result he cannot be involved in the promotion, formation or management of a company in the UK for six years.”
Cathryn Scott, Regulatory Director for Ofgem, said “Protecting consumers is our top priority, and when concerns were raised about Extra Energy Supply’s treatment of customers, Ofgem investigated, and found strong evidence that people were being surprised with huge energy bills and their complaints were not being handled to an acceptable standard.”
“Ofgem has supported the Insolvency Service to bar this director from the industry, which sends a strong message that this kind of behaviour will not be tolerated.”
The Secretary of State for Business and Trade accepted a disqualification undertaking from Ben-Moshe, and his 6-year ban began on 15 November 2023. It prevents him from becoming involved in the promotion, formation or management of a company, without the permission of the court.
Energy firm crisis in the UK
Ofgem uncovered strong evidence that customers were being subjected to unexpected bills and their complaints were not being dealt with adequately.
The regulator took action against the company’s former director, Ben-Moshe, who accepted a 6-year disqualification from running a company without court permission. This sends out a clear message that this kind of behaviour will not be tolerated by Ofgem or any other energy firm regulator in the UK.
Extra Energy Supplies Ltd ceased trading on 1 November 2018, leaving more than 100,000 customers without an energy supply. The Financial Conduct Authority (FCA) is now working to ensure all energy suppliers impacted by the decision receive a fair outcome.
Cost of living crisis
Cost of living crisis is hitting many parts of the UK’s poorest areas hard. According to the charity Citizens Advice, people in lower-income households are spending a higher proportion of their income on energy bills than they did 10 years ago.
The UK’s energy regulator is taking action to protect customers by introducing stiffer regulations and tougher penalties for companies found to be breaking them. We believe that all energy firms should adhere to the highest standards when it comes to customer service and we will continue to monitor the situation closely.
By working together with government, regulators and industry groups, everyone should have access to affordable and reliable energy. This is essential in order for the UK’s poorest areas to have a brighter future.