Secretary of State for Trade & Industry v Carr & Ors

Facts

Richard Carr was a director and chief executive of TransTec Plc from November 1994 until his resignation on 23 December 1999. A chartered accountant by training, he pursued an ambitious acquisitions programme for the engineering group, whose principal customer was the Ford Motor group. A subsidiary had won a contract to produce cylinder heads for a new Ford engine at a plant at Campsie in Northern Ireland, but production failed badly and Ford, though contractually entitled to little, pressed a commercial claim for recompense quantified at over $100 million. The claim was settled in August 1997 for US $18 million, payable by deductions from Ford's account. Neither the claim nor the settlement was disclosed to the full board, the auditors or the Stock Exchange, and the payments were accounted for as contributions to tooling. A separate £400,000 payment to Rover was likewise capitalised as tooling. The claim came to light in December 1999 when Ford mentioned it to the company's advisers; Mr Carr resigned and receivers were appointed on 29 December 1999. Inspectors appointed under section 437 of the Companies Act 1985 reported, and the Secretary of State applied to disqualify Mr Carr under section 8 of the Company Directors Disqualification Act 1986. Mr Carr did not resist the application, but admitted nothing; he was acquitted of related criminal charges in March 2006.