DCSIMG

Ex-Derry City FC directors agree to disqualification

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editorial image

The Department of Enterprise, Trade and Investment (the Department) has accepted disqualification undertakings from two former directors of Derry City Football Club.

The undertakings, for eight years from Stephen McCarron (42) of Moore Street, Derry, and three years from Eamonn Lynch (41) of Mansfield Grove, Derry, were in respect of their conduct as directors of Wellvan Enterprises Limited (the Company).

The Department previously accepted disqualification undertakings for nine years, six years and six years from three other directors on October 24, 2013, and six years from another director on October 25, 013.

Wellvan Enterprise traded as Derry City Football Club and entered administration on November 20, 2009 with estimated total assets available for preferential creditors of £380,000, liabilities to preferential creditors of £45,866, liabilities to unsecured creditors of £1,648,156, and an estimated deficiency as regards creditors of £1,314,022.

After taking into account the losses incurred by members (the shareholders) of the Company, the total estimated deficiency was £1,434,522. The Company subsequently went into liquidation on November 10, 2010.

The Department accepted the disqualification undertaking from Stephen McCarron on February 5, 2014, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

* causing and permitting improper use of dual contracts in respect of the participation in the League of Ireland by causing and permitting both the continued use of pre-existent sham contracts and the submission of other new sham contracts to the FAI in an attempt to circumvent the requirements of a protocol designed, inter alia, to prevent financial mismanagement of football clubs;

* causing and permitting the Company to fail to secure an apartment for a prize in the development draw, by failing to ring fence funds for that purpose and failing to account for same to the Joint Administrators and Joint Liquidators;

* causing and permitting the Company to fail to maintain/preserve/deliver up adequate accounting records;

* causing and permitting the Company to make preference payments to himself and other directors of £133,000 which reduced the amount owed by the Company to the directors to £146,443;

* causing and permitting the Company to accept customer prepayments at a time when there was no reasonable prospect of avoiding a formal insolvency and/or failing to supply services paid for;

* causing and permitting the Company to misuse a bank account at the Bank of Ireland in that a total of 15 cheques with a value of £64,662 were returned unpaid in the period May 7, 2009, to November 21, 2009.

* causing and permitting the Company to be financed by the retention of £785,295 due to the Crown consisting of £343,746 in respect of PAYE tax and £309,562 in respect of NIC for the tax years 2008/09 and 2009/10; and £131,987 VAT from the quarters ending 04/2008 to 01/2010; and failing to submit Crown returns on time, or at all.

The Department accepted the disqualification undertaking from Eamonn Lynch on February 17, 2014 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

* causing and permitting improper use of dual contracts in respect of the participation in the League of Ireland; drawing up and submitting to the FAI, deceptive and or sham contracts; attempting to circumvent the requirements of a protocol designed, inter alia, to prevent financial mismanagement of football clubs;

* causing and permitting the Company to fail to secure an apartment for a prize in the development draw, and/or to failing to account for same to the Joint Administrators and Joint Liquidators;

* causing and permitting the Company to fail to maintain/preserve/deliver up adequate accounting records;

* causing and permitting the Company to make preference payments to himself, and other directors of £81,500, which reduced the amount owed by the Company to the directors;

* causing and permitting the Company to be financed by the retention of £384,376 due to the Crown consisting of £168,494 in respect of PAYE tax and £149,740 in respect of NIC, and £66,142 in respect of VAT from June 24, 2008, to February 27, 2009; and failing to submit quarterly VAT returns to the Crown on time for the quarters 07/2008 to 10/2008.

 
 
 

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