Vince Cable has rogue directors in his sights, announcing plans to stop people who are convicted of commercial crime overseas from being directors of British companies.
The business secretary said dishonest directors could cause “huge” harm.
UK criminals can already be banned as directors, and Mr Cable wants the same for those committed overseas.
The Department for Business, Innovation and Skills (BIS) said the measures are due to be tabled in the Parliamentary session which ends in spring 2015.
They would mean “stronger deterrents” and “more robust sanctions” for the “rogue minority”.
Vince said:
These measures will protect the British economy and our reputation as a good and fair place to do business by banning directors who have already been convicted of offences overseas from running British companies,” he said.
Rogue directors can cause a huge amount of harm in terms of large financial losses, unnecessary redundancies and lifelong investments going down the drain.
These measures come after the very busy BIS department has cracked down on payday lenders, increased consumer rights and attempted to tackle high executive pay.
Photo: Some rights reserved by A.Golden
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9 Comments
This is welcome news
There is another class of “rogue directors” Vince needs tackle.
This is the group of directors who liquidate a company and leave customers and suppliers out of pocket and then promptly set up another company often offering the same or similar service / product under a totally different company name I have had my fingers burnt by just such unsrcupulous persons on two occasions in the past five years and know other people who have been similarly caught out only to discover the person/s in business again within months
He’s about a year ahead of you on serial-failure directors:
Cable plans tougher measures for failed company directors, July 2013.
This particular set of plans is an important prerequisite: if people can hide what companies they own then you can’t regulate their behaviour at all.
All well and good to SAY that he has rogue directors in his sights, but as the Government departments that were most likely to encounter such people, BIS & HMRC, have had significant job cuts (and certainly HMRC is due to shrink even further), then the chance of them being caught is going to fall.
Sounds like a good thing to do, but it does seem to imply that we in the UK are now going to be relying on other country’s justice systems to restrict some people’s rights or freedoms within the UK. I bet there’s a bit of a legal minefield involved, as well as some tricky foreign policy issues.
Will we have a list of countries whose bans we accept? Would we accept an Argentinian ban on someone? A Nigerian ban? An Afghan one? Might there be tit-for-tat consequences?
@Andrew Suffield – I must have missed that Do you know if the good intentions have turned into action yet ?
Rabi is right. And of course the pubco industry is riddled with such people. And which industry has Vince consulted on reforming, only for no formal Government response to the consultation a year later….?
@Richard Deans
It might be best to have a tribunal to hear appeals against bans on the grounds that the overseas conviction has been spurious. Evidence of events in autocratic or dysfunctional regimes is not easily assessed, but our immigration tribunals and, ultimately, our courts are used to assessing the veracity of asylum seekers, for example. There may not be many such cases – regimes have plenty of other means of oppressing their opponents without it even occurring to them to bring false prosecutions for a non-existent commercial crime. However, this is not to say that such situations do not arise, e.g. there might be a spurious conviction of a political opponent for corruption (by a corrupt regime).
How big a problem is this? Rabi Martin’s well-made point about home grown directors (sometimes deliberately) putting themselves through, to the detriment of employees as well, and then restarting is surely a bigger issue and therefore a bit more voter-friendly now that we’re in the count-down.
@Robin Bennett
The story may not be as simple as LDV write.
http://www.ft.com/cms/s/0/4d60bf46-c713-11e3-929f-00144feabdc0.html
http://www.bbc.com/news/uk-27079682