The High Court partially lifted a five-year restriction on Aidan Higgins, a former director of Xnet Information Systems Ltd, allowing him to act as a director or secretary of a company subject to a reduced capital requirement of €7,500 and other conditions.
In a judgment delivered on 10 October 2006, O’Neill J. found the risk to the public from allowing Higgins to act as a director again was “very low”. The judge said the conduct that had led to the restriction was serious, but considered it alongside Higgins’s earlier responsible conduct at the company and his repayment of money owed to it after its winding up.
The original restriction was imposed in May 2004 under section 150 of the Companies Act 1990. The earlier judgment found that Higgins and another director entered into financial transactions between themselves and the company without consulting fellow directors or obtaining board approval. Those transactions included company loans to the directors connected with the purchase of premises at Glencormac, Kilmacanogue, and a later rent increase. The earlier court said the transactions showed disregard for directors’ obligations, but did not attribute dishonesty or bad motive to them.
Higgins applied under section 152 for relief. His case was that the restriction prevented him from developing commercial ideas through a limited company, and that he could not afford the statutory capital threshold to qualify for an exemption. The liquidator did not oppose the application. The Director of Corporate Enforcement, appearing as notice party, argued that the public interest and deterrence justified keeping the restriction in place, or granting relief only on safeguards.
O’Neill J. accepted that Higgins had shown a need for relief and that he could not meet the existing capital requirement. The judge also found that the period under restriction and the stigma attached to it had already had a significant deterrent effect. However, because the original conduct was serious, the court declined to remove the restriction entirely.
The court reduced the capital requirement to €7,500. Higgins must notify the Director of Corporate Enforcement of the name of any company in which he takes a role covered by the restriction. The Director may apply to vary the conditions or revoke the relief. The court also directed that details of the relief be entered on the register under section 153(2). Other proposed safeguards, including requirements for independent directors and restrictions on voting, were refused as too burdensome.