Not-for-profit enterprise boss faces music over director ban

The boss of an Ashford-based community interest company (CIC) has received a second director disqualification for continuing to run the music initiative despite previous ban, and for failure to maintain adequate accounting records

The Music Hub Plus was incorporated as a CIC in April 2015, with Kathryn Holton appointed a director at the same time. It was set up to provide music courses and a unique space for musicians in the local Ashford area.

However, two years later The Music Hub Plus entered into creditors voluntary liquidation in April 2017 due to loss of contracts and increased creditor pressure.

Holton resigned as a director in August 2016 before the company went into liquidation, but continued to act as a director as The Music Hub was winding down.

However, she was strictly forbidden from running companies for seven years as she had accepted a disqualification undertaking in October 2016 in connection with two other companies that had entered into insolvency proceedings.

An Insolvency Service investigation found that during her time as a director of The Music Hub Plus, Holton was remiss in her director duties as she caused the company to fail to maintain adequate records and/or deliver such records as were maintained to the liquidators.

This failure has meant the liquidators have been unable to determine The Music Hub Plus’s final assets, liabilities and deficiencies, as well as the legitimate nature of payments out of the CIC’s account totalling more than £62,000.

These payments included more than £10,000 worth of expenditure on the company credit card, as well as close to £9,000 paid to the CIC’s landlord, when the lease was held in the names of a former director and former employee.

Holton did not dispute that she had failed to ensure The Music Hub Plus maintained adequate accounting records and deliver them up to the liquidators, and that she had also contravened restrictions imposed upon her following a previous directorship disqualification. She has now been banned from being a director for ten years.

Peter Aldridge, also from Ashford, who was formally appointed director of The Music Hub when it entered liquidation, has also signed a six-year disqualification undertaking in respect of the failures regarding the company’s accounting records.

Anthea Simpson, chief investigator for the Insolvency Service, said: ‘Not only did Kathryn Holton disregard her duties as a director of a CIC but she defied a disqualification undertaking she had personally signed-up to when she continued to run The Music Hub Plus.

‘Ten years is a significant ban and should serve as a warning to others who run CICs that you are not immune from acting within the law when it comes to being a responsible company director.’

Report by Pat Sweet

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