Lloyds directors risk court action over Virgin F1 deal

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The Independent Online

Directors of Lloyds risk prosecution by Companies House if they fail to deliver documents connected to the Government-owned bank's investment in the Virgin Racing Formula One team by today.

Lloyds Development Capital (LDC), the bank's private equity arm, bought an undisclosed stake in Sheffield-based Virgin Racing in 2009 and gave it a £6.5m loan, according to documents filed by the team's parent, Manor Holdco. In November last year, the Russian sports car manufacturer, Marussia, bought a controlling interest in the company from LDC and Corvina Holdings, an investment vehicle owned by Sir Richard Branson's Virgin group.

The sale left LDC with a minority stake, although its representatives occupy two of the six slots on the board of Manor Holdco. They are LDC's chief executive, Darryl Eales, and Carl Wormald, the head of its Manchester office. On 25 October, Companies House sent a notice of dissolution to them and all of the other directors, including the team principal John Booth and Marussia's UK managing director, Andy Webb.

It was triggered by Manor Holdco's failure to file its 2010 accounts which were due on 28 July this year. Under the Companies Act, a company can be struck off for not filing accounts. The delay has already landed the company with a £750 fine and failure to file accounts is a criminal offence for which all the directors are liable. Manor Holdco was incorporated in late 2009 and has never lodged any accounts with Companies House.

In response to the dissolution notice, the directors committed to filing the accounts within four weeks and Companies House agreed to suspend its strike-off action. "We normally put a hold on for 28 days," said a spokesman for Companies House, "and 28 days from the date we suspended it, which was 26 October, is 23 November."

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