The Business Secretary Vince Cable is after the scalps of nine former directors of the collapsed savings club Farepak, including the former City luminary Sir Clive Thompson and Blacks Leisure's chief executive Neil Gillis.
The nine face disqualification from acting as directors after the Insolvency Service lodged an application in the High Court in London last week on behalf of Mr Cable.
The move follows a "long and complex investigation" into the demise of Farepak, the Christmas hamper scheme which left 150,000 people a total of £40m out of pocket when it collapsed in 2006 and it was revealed that members' savings were not ringfenced.
"The application was made in the public interest on the grounds that the conduct of each director in relation to the relevant company or companies makes him or her unfit to be concerned in the management of a company," the Insolvency Service said in a statement.
The disqualifications could run for as long as 15 years if the High Court upholds the application. But the action is expected to be contested.
Sir Clive – who was the chairman of the Farepak parent company, European Home Retail (EHR) – is the highest-profile name on the list. A former president of the Confederation of British Industry (CBI), Sir Clive's career included a two-decade stint as the chief executive of Rentokil and directorships at Sainsbury's, Wellcome and BAT Industries.
The list of directors also includes former Farepak managing director Nicholas Gilodi-Johnson, the former EHR chief executive William Rollason – who is also a non-executive director at photographic chain Jessops – and former finance director Stevan Fowler.
Mr Gillis – who was a non-executive director of EHR – last week said he will step down from his role as chief executive at Blacks Leisure in six months. He made no mention of Farepak or the Insolvency Service application when he made the statement.
Farepak directors have already fought off legal action from the company's liquidator, BDO, claiming that they carried on trading when they knew the scheme was bankrupt. The case concluded last year with the out-of-court settlement worth £4m, including legal costs, although the directors refused to admit liability. The extra money boosted creditors' payouts from 5p to 15p for every £1 lost.
Farepak was designed to help low-income customers save for Christmas, with monthly payments throughout the year turned into either food hampers or vouchers for use in shops during the festive period. When the scheme collapsed, the average customer lost £400, but some were more than £2,000 out of pocket.Reuse content