The Secretary of State for Business, Energy and Industrial Strategy has accepted a disqualification undertaking from Richard Charles Nichols for a period of 9 years, commencing on 24 April 2017. Mr Nichols had not disputed that he had failed to ensure that the rest of the EBCU Board either agreed, or were even aware of, changes in the contract with a company of which he was also a director. This caused additional fees of £392,629 to be charged by that company. Additionally, by failing to include the monies charged and paid out to his other company in EBCU’s accounts, he failed to ensure that EBCU filed accurate accounting information to the Prudential Regulatory Authority (PRA), at a time when EBCU’s capital position was below the required level and it was subject to the PRA’s regulatory enquiries.
The Secretary of State has also accepted disqualification undertakings from Phillip Raymond Neale and Gillian Birkett for 6 years each. Both they and Mr Nichols did not dispute that they had failed to ensure that EBCU obeyed a voluntary imposition of requirements, agreed with the PRA on 24 December 2014, to cease the normal operation of the credit union until such time that it was able to meet regulatory requirements: In the following weeks EBCU further damaged the liquidity of the company, by continuing to issue loans in direct breach of the restriction.
The disqualification prevents Mr Nichols, Mr Neale and Mrs Birkett from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of their disqualification terms without the permission of the Court.
Commenting on the disqualification, David Brooks, Group Leader at The Insolvency Service, said: “On 19 December 2014, Mr Nichols told the Board of EBCU that the company had ‘broken all rules in the book’ and ‘can’t continue to flout the rules’. However, both he and Mr Neale and Mrs Birkett then allowed the company to do just that, leading directly to its failure. In addition, Mr Nichols allowed a serious conflict of interests to occur regarding a second company, which carried out all almost-all administrative functions within the credit union. He then failed to prioritise his duties to EBCU regarding both the agreement of a fee structure with that company and the accurate reporting of the intercompany transactions in its accounts. This is serious misconduct and the high tariff of disqualification reflects the seriousness of such behaviour.”
