Chester gets 12 year ban and pays back £640,000
Dennis Chester, the former chairman of Faulds Advertising, has been banned from being a company director for twelve years - one of the longest bans ever imposed by the Department for Trade and Industry.
It has also emerged that KPMG, the original receivers of Faulds, pursued Chester for the £750,000 dividend paid to him shortly before the agency went into liquidation, and settled out of court with Chester paying £640,000. The money will be used by the liquidator, PricewaterhouseCoopers, to pay a number of the unsecured creditors.
KPMG will have filed a report with the DTI on whether or not he was fit to be a director.
The maximum ban that a director can receive is 15 years - the minimum being just two. Chester began his 12 year suspension in July this year.
When KPMG was first appointed to the case in 2003, liquidator Blair Nimmo warned that it was unlikely unsecured creditors would recover the money that they were owed, although he did confirm that legal action would be likely to retrieve some of the £2.7m owed.
Chester led the management buyout of Faulds Advertising - the biggest agency ever to operate in Scotland - in December 2001. However, following the loss of a number of high-profile accounts, including Kwik-Fit and Royal Bank of Scotland, and a doomed attempt to open in London through the acquisition of MMDH, the agency was forced into liquidation.
Faulds subsequently shut in September 2003, reportedly owing more than £3m.
Chester could not be reached for comment, however, the agency’s founder Jim Faulds said: “I was very sad to see what happened and felt very sorry for the staff that had lost their jobs. It was a great team and I’m glad to see that most of them have landed on their feet. I’m delighted that some of the creditors have got their money back as well.”
News analysis: page 11.