Insolvency trade body R3 has slammed the government for failing to take action against dishonest and fraudulent company directors.
R3 claims the number of directors disqualified for misconduct by the Insolvency Service has fallen by 25 per cent over the past eight years.
According to its figures, insolvency practitioners submitted more than 7,000 reports about directors' behaviour to the Insolvency Service last year, but less than 1,400 of these resulted in disqualification.
As a result, it is calling on the service to ramp up its investigative efforts so that a higher proportion of dishonest directors are rooted out.
Steven Law, president of R3, said: "This mechanism is in place to protect the general public and other businesses from dishonest directors. Not punishing directors who are blameworthy sends out a dangerous message to others."
R3 blames a lack of resources for the service's failure to investigate and claims this could lead to more complex ones being overlooked.
Law continued: "R3 would like to assist the Insolvency Service in implementing an effective system, which ensures that it is not just the easier cases that are pursued."
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