Secretary of State for Business, Enterprise and Regulatory Reform v Charter Financial Solutions Ltd, Charter Financial Solutions (UK) Ltd, Finance Select (UK) Ltd., Bounce World Ltd and Trash Express (UK) Ltd
High Court 22 May 2009

This case related up to winding up of the above companies by the Secretary of State, of which only that against Finance Select Ltd was contested.

Charter was the beneficiary of a consumer credit licence and acted as a broker of financial services products particularly to those with a poor credit history. Charter recruited sales agents throughout the country and sold members of the public franchises of Charter's business concept.

Charter became subject to a number of County Court judgements which prevented it from trading further. The founders of Charter formed a new company Finance Select to take over Charter's business and obtained a consumer credit licence for Finance Select. The Office of Fair Trading

revoked that licence on the grounds that the directors used different names, had not admitted to the judgements against the previous company, and had a used fictitious and misleading testimonial. That revocation was overturned on procedural grounds.

The Secretary of State then sought to wind up the companies on the grounds of public interest. In doing so under the Insolvency Act 1986 s.124A the Court was entitled to consider past conduct that existed at the time the petition was heard. Where there had been a serious lack of probity in the way the founders of the company had conducted the affairs of the new company and where directors and controllers were ready to act beyond the boundaries of the law and regulation it was appropriate to grant winding up orders.

(c) R J Imrie 12/01/2010