Keurboom Communications whose sole director is a Greg Rudd, 51, has been fined £400,000 for 100m nuisance calls. Keurboom is in liquidation such that the fine does not get paid. This has led to hand-wringing on a big scale.
Apart from the fact that the fine should be capable of being stuck on a director such as Rudd he was surely trading whilst insolvent which means that liabilities of Keurboom from the point that insolvency can be reckoned to have occurred are his personally.
My nephew who lives and works in California told me a couple of years ago that each nuisance call attracts a fine of $2,000. An aggregate fine of 100m times $2,000 would soon settle Rudd and his like.
My wife and I are in the wings of a lady who is closing a solvent LLP set of books and transferring this simple business to a limited company. She has been the operating partner for some years and in effect is the same person behind the limited company. You might think that all this can be done in ten minutes. But Oh No, regulation means that the account opening procedures which have now taken some weeks are being attended to in Guildford rather than the West London branch which has always handled all the business. This is very similar to all the trouble my younger daughter and her mother faced when opening another tiny little limited company account two years ago and is evidence of the sheer stupidity of HM Government in practice.
Some say that binding shareholder votes on directors’ pay should be an election manifesto promise. This is fine provided it remains just a manifesto promise. The problem is that it is wholly impractical – as a moment’s reflection will show. Please consider the following exchange between a very able chap (VAC) and a recruiting board (RB):
VAC: “I accept your offer of £1m a year subject to shareholder approval at a general meeting of shareholders perhaps six months off. But I seek a 20% uplift during this interim period just in case they do not confirm my contract. I am unsure as to what my position will be if confirmation is not achieved.”
RB: “Noted. But we are limited by the remuneration consultants’ advice as to the going rate.”
VAC: “In which event we have no deal unless we have a general meeting in the shortest time the law allows.”
RB: “This is too costly for so limited an agenda. We are sorry that you cannot join us.”
The truth is that shareholders have to leave RB to all sorts of decisions and trust them. It is merely that of late some non-RB shareholders think they know how much a director should be paid when it is almost impossible for them to be sufficiently informed to allow a wise comment. Just think of the promotion of Jeremy Corbyn.
Incidentally, the notion that Martin Sorrell is not overpaid is absurd. His current pay is down to a supine board. There is a cure for that: a vote at a general meeting.
Finally, I lunched copiously yesterday. One of my fellow guests, now 71, ceased working at Wormwood Scrubs prison after ten years of seeking restorative justice. He saw constantly at very close hand the nature of the prisoners and their circumstances. He is extraordinarily pessimistic in that conditions are bound to lead to major explosions and violence given that half the prisoners are drug addicts and/or mentally subnormal. Matters are deteriorating.