THE director of a car dealership and repair services firm in Aberdeen has been banned for seven years after acting to the detriment of his customers and company creditors.
Stuart McDonald, 37, of Dyce, was the solely appointed director of Northern Motors (Aberdeen) Limited from September 2013, having first been appointed a joint director in June 2007.
Incorporated in 2006, Northern Motors traded as a car dealership from Rambala, Dyce Drive, Dyce, Aberdeen, while also offering repair and maintenance services. However, it ceased trading in August 2016 soon after an enforcement order was granted to Aberdeen’s trading standards department against the company in connection with several breaches of the Enterprise Act 2002.
The order required McDonald to stop acting against the interest of customers and was granted in connection with complaints about Northern Motors received by trading standards between September 2014 and 2016.
They included selling vehicles to consumers while finance was outstanding, failing to honour payments to consumers and neglecting to provide the appropriate DVLA registration documents at the time of the sale.
Further examples of misconduct included the sale of illegal goods in terms of applying for incorrect registration plates and failing to register the transfer of vehicles to the DVLA.
After legal action was taken by North Yorkshire trading standards officials against McDonald, he pleaded guilty in April 2016 to allegations that he had caused the company to trade in harmful practices.
In May 2017, the Financial Conduct Authority withdrew permission for Northern Motors to conduct consumer credit activities, and it was liquidated in June 2017 following a winding-up order, with the matter referred to the Insolvency Service to probe his conduct while a director of the company.
Investigators discovered that in August 2016, just after the enforcement order was obtained, McDonald caused Northern Motors to dispose of a property worth £265,000 to a connected party. The payment was not only detrimental to Northern Motor’s creditors but also resulted in the insolvency of the company.
While some money from the proceeds of the sale was paid to the company’s bank and to clear a loan, £116,000 was paid directly to McDonald’s bank account. And although he claimed that more than £87,000 was paid to Northern Motors’ creditors, the company’s lack of accounting records meant he couldn’t verify the payments.
Northern Motors also owed at least £80,000 in tax and a further £111,000 to its creditors.
McDonald has now signed a disqualification undertaking, meaning he is banned for seven years from directly or indirectly becoming involved – without court permission – in promoting, forming or managing a company.
After the case, Insolvency Service chief investigator Robert Clarke said: ‘When directors do not comply with legislation that is designed to protect customers and avoidable losses occur, the Insolvency Service will fully investigate the circumstances and take action where appropriate.
‘In this case, a significant number of customers have been left out of pocket as a result of Mr McDonald’s disregard of protective legislation and it is appropriate that his disqualification is for a significant period of time.’