Court disqualifies former Imperial bosses

The former chairman and chief executive officer of Imperial Consolidated, the accident-prone Lincolnshire finance house, have been banned from acting as directors of British companies after an application by the Official Receiver. Lincoln Fraser, 29, and Jared Brook, 31, co-founders of the Imperial Consolidated Group, have each been disqualified for four years.

The two men resigned in April, less than a month after the Independent on Sunday revealed that they had been involved in the bankruptcy of a hotel management company in Morecambe, Lancashire, in the mid-Nineties.

Their disqualification was ordered at Blackpool County Court, over their activities while directors of Progressive Leisure Corporation, which managed the Midland Grand Hotel in Blackpool and was compulsorily wound up in 1995 owing £117,000. In July 1995, a local newspaper reported on its front page: "Morecambe's Midland Hotel was closed today after it was hit by a cash crisis. Guests were told to leave the hotel ... people arriving were turned away. They were told the hotel's managers, Jared Brooke [sic] and Lincoln Fraser, had left and the building [been] stripped of bed linen."

A creditor made Fraser, then 23, personally bankrupt. The bankruptcy was discharged in November 1997 after he settled his personal debts.

A continuing investigation by the Insolvency Service led to the application to disqualify the men from holding directorships. The Insolvency Service said yesterday that allegations of unfit conduct found by the court against the defendants included:

"That they traded the company with knowledge of insolvency to the detriment of its trade creditors. That they failed to maintain, preserve or deliver up adequate accounting records for the company as required by the Companies Act 1985. That they misused the company bank account by tendering cheques to creditors without due regard to the prospect of those cheques being honoured upon presentation and by allowing direct debits and standing orders to go unpaid on a regular basis to the detriment of creditors.

Mr Fraser and Mr Brook said yesterday that the ruling was based on "technical issues".

A spokesman, in a statement from them, said: "This was a civil case and there is no suggestion that either of us acted dishonestly or criminally. Following the winding-up of Progressive Leisure, all creditors were paid by us personally ensuring that no one lost out. Our business contacts and the relevant regulators have been kept aware of this action.

"The ruling does not come into force for a month and we will take that time to consider our options – one of which is to apply to the court for permission to retain our current directorships."

It has been a difficult year for Imperial Consolidated, which is based at the former RAF site at Binbrook in Lincolnshire.

Founded in 1994, Imperial Consolidated is a UK-based financial group with subsidiaries in 11 countries, mostly offshore. It started as a debt-collecting agency and in Britain it now employs 340 people. It says it has 28,000 British clients for its various investment schemes.

Imperial has been advertising recently in the Financial Times and other papers to buy commercial debts from cash-strapped firms.

Last year, Imperial's subsidiary, the Grenada-based Imperium Bank, launched an offshore Mastercard credit card called Hint. But it withdrew the card in November 2000. Imperial Consolidated says it intends to launch a UK-based card soon.