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Note: Although Steven Kluk, Director of Morija Plc (Company), discovered two instances of fraud by Company against the Bank of Scotland (Bank), he failed to report them to Bank. One instance involved a misrepresentation in obtaining a letter of credit for UK£112,320, and the other ---involved using false invoices in an application for a loan for UK£553,724. When Company failed, Kluk personally agreed to repay the funds to Bank. In addition, pursuant to the UK Company Directors Disqualification Act, 1986, c. 46, Kluk agreed not to serve as a company director without leave of court.

In order to obtain funds to repay the debt, Kluk took a position as director of another company and sought leave of court. He pointed out that he had not discovered the letter of credit fraud until it had already been found after Company's collapse, making disclosure by him irrelevant.

The Registrar denied leave of court. On appeal, the High Court of Justice Chancellery Division, Sir Andrew Park, affirmed.

[JEB/mcb]

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