Disqualification of Directors Following Customer Fund Mismanagement

A furniture retail company recently faced serious regulatory consequences after its Directors, George and Williamina Hay, knowingly accepted customer payments for goods they could not deliver.
The married Directors of this Aberdeenshire-based company specialising in adjustable beds and chairs continued taking orders for six months despite severe financial distress, ultimately entering liquidation owing customers approximately £97,000.
The company had been established for just over two years when financial troubles became apparent. By April 2023, with bank balances under £6,000 and no other assets, the Directors already had 13 unfulfilled orders worth £27,250. Nevertheless, they proceeded to accept 55 more orders before liquidation in October, with 42 of these orders (valued at £69,750) never even placed with suppliers.
Many affected customers were elderly or vulnerable. Cases included a Stonehaven pensioner who lost a £2,000 deposit for an adjustable chair and a west Aberdeenshire resident who paid a £9,000 deposit for furniture never delivered. Customers from regions including Dundee and Elgin also suffered losses.
Following an investigation, both Directors received seven-year disqualification orders effective March 2023, prohibiting them from company promotion, formation or management without court permission. At liquidation, the company’s total creditor liabilities reached £143,340.
This case demonstrates the serious consequences for directors who continue accepting customer funds while knowing goods cannot be supplied, particularly when vulnerable consumers are involved. Businesses must maintain proper financial controls and transparent customer communication to avoid similar outcomes.
Mike Smith, Chief Investigator at the Insolvency Service, said:
“George and Williamina Hay both took orders from customers in the six months before their company went into liquidation, most of which they knew would not be fulfilled. Most of the customers they took these orders from were elderly and vulnerable. Both George and Williamina Hay have fallen significantly short of the standards we expect of company directors which is why they have now been disqualified until March 2032.”