HELENE PLC AND BARRY ARTISTS LIMITED DIRECTORS DISQUALIFIED BY DTI

8 Mar 2001 12:00 AM

Michael Leslie Harris of Radlett Hertfordshire, the former chairman of Helene plc, has been disqualified by the High Court for 13 years from acting as a director of a company. Mr Harris did not defend the proceedings.

In banning Mr Harris, Mr Justice Evans-Lombe said that he had systematically looted the company.

Helene plc was the listed holding company of a small group of garment manufactures. Barry Artists Limited was one of its subsidiaries. On 10 July 1997 Helene plc was placed into creditors voluntary liquidation with an estimated deficiency of over #29 million. A compulsory winding up order was subsequently made against the company on 5 November 1997 in the Court of Session in Scotland.

Barry Artists Limited was placed into administrative receivership on 19 May 1997 and subsequently into creditors voluntary liquidation on 9 July 1997 with an estimated deficiency of over #17 million.

The disqualification proceedings were taken following enquiries carried out by the Companies Investigation Branch (''CIB'') of the Department of Trade and Industry under the provisions of section 447 of the Companies Act, 1985.

The allegations made by the Secretary of State against Mr Harris included that he had caused:

(1) expenditure by Helene plc and Barry Artists Limited which was in excess of what the companies could afford, which was inadequately accounted for and, to a large extent, was expended for his personal benefit. His total expenditure on company credit cards from January 1995 onwards amounted to some #594,546 of which #173,150 was ''gifts'', #183,981 was clothing described as ''samples'', #27,777 was ''entertaining'' and #174,631 was ''travel'' in addition to some #586,892 expended on travel by Barry Artists Limited, again principally for his and his family''s benefit.

(2) the employment of members of his family by the companies at excessive salaries and benefits notwithstanding that their contribution to the companies was negligible;

(3) the misapplication of some #340,000 of Helene plc''s funds; and

(4) a joint venture with a company in the Far East which was inadequately supervised and inadequately accounted for.

NOTES FOR EDITORS

1. The High Court ruling was made on 23 February 2001 when Mr Harris was disqualified for 13 years for his conduct in relation to Helene plc and Barry Artists Limited.

2. Earlier High Court proceedings against Michael John Milan of Edgware Middlesex, the former managing director of Barry Artists Limited and against John Christopher Forsyth of Chinor Oxfordshire, the former group finance director were disposed of by consent using the ''Carecraft procedure''. On 3 November 1999 Mr Milan was disqualified for 6 years for his misconduct in Barry Artists Limited. On 9 February 2001 Mr Forsyth was disqualified for 4 1/2 years for his misconduct in Helene plc and Barry Artists Limited.

3. The ''Carecraft procedure'' is where the defendant to proceedings effectively consents to a Court Order under which he or she is disqualified from acting as a director on the basis of a statement of undisputed facts agreed by both parties.

4. In relation to Mr Milan, matters of unfit conduct included in the statement of facts not in dispute, agreed between the Secretary of State and Mr Milan included that in relation to Barry Artists Limited he caused or failed to prevent the company''s:

(a) excessive and unwarranted expenditure;

(b) failed to inform himself of the excessive expenditure being incurred, principally by Mr Harris, on company credit cards;

(c) allowed members of Mr Harris''s family to be employed, notwithstanding that their contribution to the company was negligible.

5. In relation to Mr Forsyth, matters of unfit conduct in the statement of facts not in dispute, agreed between the Secretary of State and Mr Forsyth included that in relation to Helene plc and Barry Artists Limited he failed to prevent:

(a) excessive and unwarranted expenditure by Mr Harris and Mr Milan and

(b) the retention and excessive remuneration of unnecessary employees.

6. Costs were awarded to the Secretary of State in all of the above actions.

7. The disqualification proceedings were brought under the provisions of the Company Directors Disqualification Act, 1986. Sections 6 and 8 of the Act allow the Court to make a disqualification order of up to 15 years for unfit conduct.

8. Companies Investigation Branch (''CIB'') is part of the Company Law & Investigations Directorate of the Department of Trade and Industry.

9. CIB carries out confidential enquiries under section 447 of the Companies Act 1985 and, where necessary, takes further proceedings in the name of the Secretary of State. This can include winding-up proceedings in the public interest or disqualification proceedings against the directors.

10. A bankruptcy order was made against Mr Harris on 7 September 1999 in the St Albans County Court (No 15 of 1999).

11. Further information on company investigations is available from http://www.dti.gov.uk/cld/comp inv.htm

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