VINCE CABLE has outlined proposals to shake up the insolvency process, including plans to allow courts to make a financial sanction against company directors in corporate collapses.
In a speech today the business secretary (pictured) outlined a consultation to reform the industry. The changes include a register to identify a company’s ultimate owner banning those directors which have already been banned outside the UK from running a UK company and allowing courts to hand out a fines to directors when dishing out a disqualification order.
Cable also hopes to encourage courts to consider previous company failures of a director when handing down sentences.
Cable is also seeking to give disqualification powers to the Financial Conduct Authority in addition to the Insolvency Service. He also hopes to extend the time limit for bringing disqualification proceedings against directors to five years from two.
The reforms are part of the launch of the transparency and Trust discussion paper put forward by the Department for Business Innovation and Skills (BIS).
The transparency and trust paper can be downloaded here and respondents will be given until 16 September.
As part of the transparency drive BIS also announced that it would launch a review into pre-pack administrations earlier this year, with BIS confirming that the review has been launched today. The review into the insovlency process is to see whether they encourage growth, employment and provide value to creditors.