Fifteen Year Director Disqualification handed down by the High Court

On Monday 8 November, the High Court imposed one of the longest ever disqualification periods for a company director.

The Court held that this was "one of the most extreme cases of using a company for [oil] laundering", and granted an application on behalf of the liquidator of Gaboto Limited for the disqualification of the two directors for a period of fifteen years.

Gaboto Ltd traded in both wholesale and retail fuel from a property in County Monaghan, around 600m from the border with Northern Ireland. The company also traded from a forecourt in Clondalkin, Dublin.

In the course of a wider investigation into fuel laundering along the border, Revenue Officials discovered evidence of fuel laundering at the Clondalkin premises. The company subsequently entered into liquidation and the liquidator's investigations revealed serious issues regarding the participation of the company in fuel laundering fraud causing significant loss to the exchequer.

The Court noted that there had also been no cooperation by the directors with the liquidator during his investigations, there had been a failure to keep adequate accounting records and there was a substantial debt owed to Revenue, in excess of €9 million. It was also clear to the Court that the directors had not engaged with the proceedings against them.

The Court stated that this case was at the extreme end of the abuse of a limited liability company and that there were no mitigating factors to take into account, dismissing a claim made by one of the directors in correspondence that they had no knowledge or involvement in the company's affairs. In those circumstances, the Court had no hesitation in imposing the disqualification for a period of fifteen years against both directors.

The purpose of a disqualification order is to protect the public from irresponsible directors and essentially it means that these two directors are disqualified from being appointed or acting as a director or be in any way, whether directly or indirectly, involved in the management of a company for the next fifteen years.

Together with Counsel, Shelley Horan BL, we were happy to advise the liquidator George Maloney and his team in RSM in this matter.

Written by: Ciara Gilroy and Mark Woodcock