Royston Smith – 2016 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Royston Smith on 2016-03-02.

To ask the Secretary of State for Business, Innovation and Skills, what steps he plans to take to ensure that people who lost money to Ecohouse Development Ltd will receive compensation.

Anna Soubry

The activities of the company are subject to an ongoing investigation by the Insolvency Service. The outcome of that investigation may influence the likelihood of a civil recovery using existing provisions in insolvency legislation.

Where, on the application of the liquidator, the court is satisfied that the business of a company has been carried on fraudulently or recklessly, the court can declare that persons such as directors of the company are liable to contribute to the company’s assets.

In addition, for future cases a new measure in the Small Business, Enterprise and Employment Act 2015 enables the Secretary of State to seek a compensation order from a disqualified director (this measure does not apply in this case as the legislation only came into force after the company went into liquidation).