Hinchliffe 'unfit to be director', court told

MARTIN EMMERSON

and NIGEL COPE

Court proceedings that could see former Facia chairman Stephen Hinchliffe banned from acting as a director for up to 15 years, began in Newcastle yesterday with the DTI claiming that both Mr Hinchliffe and former Facia finance director Christopher Harrison had breached their fiduciary duties, squandered money and put the interests of their own private companies first. They were "unfit to be directors of a company", the DTI said.

The DTI action relates to their involvement with Boxgrey, which collapsed into liquidation with debts of pounds 5m in 1994. Boxgrey was the re-named company which used to own En-Tout-Cas, a manufacturer of all-weather tennis courts.

At the preliminary hearing at Newcastle District Registry, Jonathan Holmes, for the DTI, said the two men had transferred money from En-Tout-Cas to other organisations in which they had interests, then failed to repay the cash when the firm started to struggle.

He also said they squandered money with the purchase of new offices at a time when En-Tout-Cas was suffering financial hardships. It would have been better for them to continue renting their existing head office instead of investing in new premises, he said.

Mr Holmes added: "They acted only in the interests of the Chase companies [in which both were involved] and through them to the personal interests of Mr Hinchliffe." These actions were to the detriment of En-Tout-Cas, its creditors, employees and in breach of their fiduciary duty, he added. "It is our application that the respondents are unfit to be directors of a company."

Mr Hinchliffe and Mr Harrison have until 24 October to reply to the application. Neither was present in court for the hour-long hearing.

District Judge Ward, who presided over the session, said that because the case was so complex he would be inviting the Vice-Chancellor, Jonathan Parkin, to hear it, probably early next year.

Once the two former directors have handed over all of their evidence the DTI will have until 16 January to review the material. A date for hearing the final application will then be set.

Both men will "vigorously defend" the application which could see them banned from being directors of companies for a minimum of five years.

Mr Hinchliffe claims he sold Boxgrey a month before it collapsed and was not responsible for placing it in liquidation.

He has said that he is confident the proceedings will be dismissed and that his name will be cleared.

Mr Hinchliffe founded Facia in 1994 and acquired a string of high street names including Freeman Hardy Willis, Salisburys, Contessa and Sock Shop.

The company collapsed into receivership in June with estimated debts of pounds 30m.

Since then, many of the shops have been sold, though some of the shoe stores remain in administration. The Torq jewellery chain, which Mr Hinchliffe acquired for just pounds 1, has not found a buyer.