Husband and wife team take £6m in client funds

A HUSBAND and wife team who ran a personal debt management company have been disqualified as company directors for a combined 24 years for taking almost £6m of client’s money.

Adrian and Christine Whitehurst have been disqualified for their conduct in Stockport-based First Step Finance Limited, a personal client debt solutions and management company which has since gone into administration.

The Whitehursts withdrew client funds of £5,943,939 from the company, in breach of consumer credit regulations, and treated it as directors’ drawings.

They then set off their liability for the amounts they owed the company by selling their shares in both a speculative overseas property development and the company itself at prices that could not be explained and to their own advantage.

Funds taken from client accounts were loaned to companies owned and controlled by family members but which had limited trading histories and minimal assets. This resulted in  £678,816 being unrecoverable from these companies when First Step went into administration in  2014.

The company had its operating licence removed in October 2013 after the Office of Fair Trading identified “serious concerns” about the transparency and integrity of its practices.

The subsequent investigation by the Insolvency Service found that although the business operated under the regulation of a consumer credit licence, it did not comply with the requirements.

Adrian Whitehurst, a director from October 2007 to July 2009 and Christine Whitehurst, who succeeded him from July 2009 to October 2013, have provided director disqualification undertakings to the Secretary of State of 10 and 14 years respectively.

Following the resignation of Christine Whitehurst the former finance manger Darren Newton acquired the company and became its sole director.

He has given a disqualification undertaking for three years and six months in respect of his allowing First Step to utilise company funds, totalling £302,500, and enter into transactions to purchase First Step’s shares for the benefit of another company of which he was a director, at a time he was aware of the deficiency on the client account and was unable to pay these sums himself.

Robert Clarke, investigations group leader at The Insolvency Service said: “Customers who are forced to use debt management companies are particularly vulnerable individuals which is why the sector is subject to stringent regulation.

“The actions of Mr and Mrs Whitehurst in deliberately misrepresenting the basis on which funds were held and then taking these monies to fund their lavish lifestyle are reprehensible and therefore disqualifications towards the top period allowed by law are entirely appropriate.”