Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you.
Who are the shareholders of the company?
Why did you not intend to repay it? Was this is anyway tacitly approved by the board?
Thank you AJ.
It is a listed company (London Stock Exchange).
I contracted to purchase a flat for £10.5 million. It is a new build flat and is being built by the company. I am the chairman of the company. I received shareholder approval.
Hi, Thank you. Were the payments in anyway approved by the boarD?
Hi, Thank you.
If you received shareholder approval there is not going to be any criminal liability.
It is possible that you may have had to notify this as a benefit under listing rules but the fact that the transaction was approved, the money repaid anyway there is no fraud or theft here.
I subsequently instructed the company to do £1.4 million of additional work to the flat (including dressing the flat and supplying artwork and furniture). Of this I was intending to pay £600k and expected the company to write off £800k. I did not have shareholder approval or board approval for this transaction.
The only sanction you could face is a potential director disqualification, but again this is for worst case scenarios of theft and where a company goes insolvent.
OK that is slightly different.
What gave you the expectation that the £800k would be written off?
Did you make any attempt to conceal it?
The issue was raised by a whistleblower and I disclosed this the board and made the payment in full on completion of the flat.
Hi, Thank you - when you retrospectively disclosed it to the board, did they approve your disclosure and accept the repayment?
By attempt to conceal it, I did not obtain consent from the board which would have been normal. The £800k was going to be written off on my instructions.
S.183 of the Companies Act 2006 states that you could face a fine.
But if the act has now been ratified and the money repaid, I would say that criminal is still unlikely.
Is this covered under the Fraud Act? Abuse of Position?
If the matter is not public this would cause embarassment for the LLP.
* For the Listed Company.
It is covered by a duty to declare an interest in proposed transactions under S.177 of the Companies Act
It is the intent to defraud that I am concerned about re:criminality. This is in writing and there is evidence about intent.
and a duty not to personally benefit or act in conflict under S.175
Fraud cases are very difficult to prove and expensive. Ask yourself - you have repaid the money - is it in the public interest to prosecute you.
When you disclosed this to the board what was their response?