Leicester: The Place To Go For Disqualification

Posted on Sep 14, 2020. by NTI

We in the NTI newsroom think that Lowry would have taken one look at the modern day skyline of Leicester and thought, 'Nope. I'm not painting that - it is way too miserable'. The only things that appear to be missing are swarms of zombies in the distance converging on the city out of the fog.

Isn't is curious how certain parts of the country become well known as go-to destinations for certain industries or activities. Birmingham has its jewellery district, there's Liverpool's thriving music scene, St Ives in Cornwall attracts artists, and Leicester? It is becoming increasingly famous for being the epicentre of disqualified directors. Rank upon rank of Leicester's textile factories have long scarred the photogeology of its horizon and now more than 50 of the directors running the industry have been banned from doing so for between three and 15 years (at an impressive combined total of more than 400 years). In fact, they represent about 40 per cent of all disqualified directors linked to companies listed on Companies House. You have to take your slightly badly made, fashion-free hat off to them.

Leicester’s textiles factories have faced heavy scrutiny since the city became the first in the UK to face a second lockdown. One factor linked to the spread of the Coronavirus was a lack of social distancing measures in some of the hundreds of factories and workshops in Leicester’s garment district, where companies are also accused of failing to pay workers the minimum wage. Andrew Bridgen, the MP for North West Leicestershire who has campaigned on factory conditions in Leicester and described the garment industry there as 'the wild west', said the activities of such companies were putting legitimate competitors out of business. 

“Many of those who have been struck off will continue to act as shadow directors,” said Bridgen, a former regional chair of the Institute of Directors. He called on HMRC to focus attention on the problem. “The regulators need to concentrate on areas of concern, and clearly what’s going on in Leicester is an area of concern. They need to risk-assess these businesses and sectors and concentrate their resources where there are obvious problems.”

On a dingy Saturday afternoon it can be fun to trawl the Companies House Disqualified Directors Register and put together a blooper reel for bad management. Regrettably, the reasons for some of these disqualifications were not available, but in 21 of the 28 files where the basis for disqualification was provided, it related to tax fraud, inadequate tax returns, inadequate accounting records or trading to the detriment of HMRC; an umbrella term for cases where other creditors, including directors, have been paid but the tax authority has not. But surely that's illegal? It's almost Dickensian to run a business with such wholesale disregard for the human being and their individual rights; where on Earth does such activity take place in the modern day? Oh, Leicester (and Cairo).

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