A recent case shows the seriousness with which the Secretary of State for Trade and Industry regards the conduct of directors when this is seriously negligent. The outcome was that two company directors have been banned from holding office as directors for 15 years.
The directors, Richard Gunter and Robin Grove, were considered to be 'recklessly indifferent and grossly negligent' in their conduct regarding the purchase of the Hallmark Partnership, by Vintage Hallmark Ltd., for £59m. Hallmark Partnership has been estimated to be worth about £5m. The directors had failed to consider whether the business was solvent and had made no attempt to confirm the value of its assets. Since the business of Hallmark Partnership was to sell wines to American medical professionals, at vastly inflated prices, the directors' failure to make enquiries regarding the true value of the assets they were acquiring was all the more remarkable. In the court's view, they were 'utterly unfit to be concerned in the management of a company'.
Company directors who fail to exercise due care and attention when carrying out their roles as directors are receiving little sympathy from the courts.
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