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Co Armagh director who allowed ‘fresh air’ invoices to be raised to draw money disqualified

He was disqualified for nine years in respect of his conduct as a director of Donnelly Transport Limited which went into liquidation in December 2020

A County Armagh man has been disqualified from acting as a director over his conduct with a local freight transport company.

Neil Donnelly (47), of Lisraw Road, Scarva, was disqualified for nine years in the High Court, Belfast.

The action comes in respect of his conduct as a director of Donnelly Transport Limited.

The company operated as freight transport by road and went into administration on September 21, 2018.

It did so at the time with an estimated deficiency as regards creditors of £922,649.

The company subsequently went into liquidation on December 16, 2020.

There was a total of £100 owing as share capital, resulting in an estimated deficiency as regards members of £922,749.

A number of matters of unfit conduct were alleged by the Department of Economy in relation to Neil Donnelly in respect of his conduct as a director of the company and accepted by the court.

These were that he caused and permitted the misuse of the invoice discounting facility by raising ‘fresh air’ invoices in order to draw money from Close Invoice Finance Limited, when there was no underlying transactions or value attached to them. This caused a loss to Close Invoice Finance Limited of £193,159.30.

He also failed to co-operate with the administrator/liquidator by not providing a completed director’s questionnaire or submitted a statement of affairs for the company in contravention to Article 199 of the Insolvency (Northern Ireland) Order 1989.

As a result, the administrator/liquidator was not provided with sufficient background into the company affairs and the assets and liabilities as at the date of winding up, resulting in a frustration of the administration and liquidation processes.

The court has made one disqualification order in the financial year commencing April 1, 2022

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