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Highland Quality Construction directors banned for eight years

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Two Highland businessmen who oversaw the collapse of one of the region’s biggest construction firms have been banned from being directors for eight years.

Gary MacDonald and Colin Thomson ran engineering firm Highland Quality Construction (HQC), which collapsed with the loss of 138 jobs in 2010.

However, an investigation by the Insolvency Service has found that they were selling vehicle which they did not own and making payments to associated companies.

The men dispute the findings, but said they have drawn a line under the row due to escalating legal costs.

They have now been blocked from taking directorships until May 2022 and May 2020 respectively.

“Company directors are required to act in the best interests of the company,” said Joanne Covell, head of investigations at the Insolvency Service.

“At a time when a company is insolvent and not paying its debts when due, the directors also have a duty to act in the best interests of the creditors.

“This is to ensure that creditors are treated fairly and in a transparent manner.

“Company assets should be handled in an appropriate manner, taking account of ownership and seeking to minimise potential losses to creditors.

“Directors that breach their duties will find themselves investigated by the Insolvency Service and could face a lengthy ban.”

In relation to 45-year-old Mr MacDonald, of Daviot, the investigation found that despite a charge for payment having been served on HQC and remaining unpaid, payments totalling £520,857 were paid to connected parties.

Additionally, seven items of HQC’s plant and machinery which were subject to finance were sold and the proceeds diverted to an associated business.

A further 10 items of equipment, belonging to a finance company, were disposed of without the consent of the finance company. These 10 items were sold for £486,000, resulting in a loss of that amount to the finance company.

In relation to Mr Thomson, 39, of Inverness, the investigation found that despite a charge for payment having been served on HQC and remaining unpaid, payments totalling £520,857 were paid to connected parties.

Additionally, 10 items of equipment, belonging to a finance company, were disposed of without the consent of the finance company.

These 10 items were sold for £486,000 meaning that a loss of £486,000 was suffered by the finance company as a result.

HQC entered Receivership in June 2010 with estimated assets of £467,490 and estimated liabilities of £9,587,495, leaving an estimated deficiency to creditors of £9,120,005.

Mr MacDonald launched HQC in 1993 and developed the firm over 17 years into one of the largest privately owned civil engineering companies in the North of Scotland, reaching a turnover of approximately £35million.

The firm went into administration after payment issues surrounding two large Central Belt contracts caused severe cashflow problems.

He said: “The past four years have been extremely difficult with the loss of the business and the on-going legal dispute. Although, we disagree with the conclusions of this process, I felt we were left with little choice but to reach settlement due to the financial strains of trying to clear our names. If we persisted to fight against this, our legal costs would have continued to spiral, so we decided that it was time to move forward and focus on the future rather than the past.”