Rigil Kent Acquisitions Limited (RKAL), presented itself as a turnaround or recovery service, and promised companies in financial difficulties that it would enable them to wipe their business debts and avoid formal insolvency proceedings, for a fee of between £5,000 and 10% of the failing company’s total liabilities. Directors were assured that they could walk away from any further financial or legal responsibility in the company. RKAL’s website described the company as ‘unlicensed Insolvency Practitioners’.
In reality, RKAL operated to subvert and frustrate the insolvency regime, to the detriment of the creditors of a significant number of companies.
Kevin Morris (also known as Kevin Gordon Sykes), the individual behind the nefarious scheme, was already disqualified from acting as a director at the time. He was found to have acted as de facto director of RKAL, in breach of his prior disqualification.
In giving his judgment, Deputy ICC Judge Schaffer stated that he found it “grossly offensive” that RKAL sought to exploit the insolvency system as it did, leaving many creditors out of pocket. He imposed a maximum disqualification of 15 years against Mr Morris, and a disqualification of 11 years against his fellow director.
Breaching a disqualification is a criminal offence and the Insolvency Service can prosecute these cases. In this case, the judge also ordered that the matter be passed to the Director of Public Prosecutions to consider further action.
The Secretary of State for Business, Energy and Industrial Strategy v (1) Fox (2) Morris
In the matter of Rigil Kent Acquisitions Limited