The number of directors of insolvent companies disqualified for financial crime is soaring as the recession takes hold, according to government figures.
Research released by Wedlake Bell, the law firm, based on figures from the Insolvency Service, shows a 72 per cent increase in the year to the end of March in director disqualification at insolvent companies where directors have been implicated in fraud and other financial crime.
The directors of 91 companies were banned for financial crime over the year as more directors turned to fraud to try to salvage something for themselves from ailing companies.
Edward Starling, a partner at Wedlake Bell, said: “We are starting to see an increase in fraud and I expect to see much more of it. It is well known that fraud follows a recession and it will take years for this to work through. Without a doubt, this is going to get worse because there is a long delay between when companies go down and these things are discovered.”
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