Call to disqualify Ferrum directors

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The Independent Online
GARY FRIER and Simon Kittoe, chief executive and company secretary of Ferrum, the engineering group created out of Floyd Oil Participants, face growing calls for DTI action to disqualify them as directors, writes Jason Nisse.

Alan Price, a partner in accountants Casson Beckman, liquidators at one of Ferrum's subsidiaries, General Materials, is set to make a recommendation on any appropriate action in a report to the DTI within the next few days.

At a stormy creditors' meeting held a week ago, Mr Price was asked to recommend disqualification by Geoffrey Morphitis, a partner at accountants Cape & Dalglish and formerly the court-appointed administrator of the companies that sold General Materials to Ferrum.

Both Mr Morphitis and a lawyer representing a number of creditors who attended the meeting told the Independent on Sunday that Mr Price was heard to say: 'Whoever is liquidator will make an adverse D (disqualification) report.'

Mr Price denied he would make such a statement.

Trade creditors are angry about two issues that emerged following Ferrum's decision to place General Materials into voluntary liquidation.

The first involved Ferrum's claim that pounds 400,000 put into its subsidiary was a loan and would have to be repaid before trade creditors.

They argue it was an investment and would have to be repaid after everyone else.

The second involved extra security given to General Materials' bankers, Barclays and Bank of Scotland, for their loans, part of a larger restructuring of group debt July.

Robert Agnew, the managing director of General Materials, claims he was not informed of the board meeting that authorised the granting of extra security and so it was not properly constituted.

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