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Note: Steven Kluk (Director) was a director of Morija PLC (First Wholesaler). While Director was on vacation, other employees engaged in approximately 130 incidents of fraud, including fraudulently obtaining an LC from the Bank of Scotland for UK£112,320 by misrepresenting its purpose. First Wholesaler later became insolvent; following its bankruptcy, Director became director of Sundernote Ltd. (Second Wholesaler).

Subsequently, the Secretary of State for Business, Enterprise and Regulatory Reform brought disqualification proceedings pursuant to the UK Company Directors Disqualification Act (1986) against the directors of First Wholesaler, including Director. Director applied to the Registrar, Jaques, R., to be allowed to remain as director of Second Wholesaler.

Director did not contest that knowing of the LC fraud while director of First Wholesaler and failing to disclose it merited disqualification pursuant to the Act.

Director retracted an earlier statement that he had discovered the frauds shortly after returning from vacation, and attempted to prove that he had only discovered the LC fraud after the bankruptcy. The Registrar found that Director discovered the LC fraud shortly after returning from vacation. On appeal, the Chancery Court, Sir Park, J., affirmed.

[JEB/dgd]

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