Serious breach of fiduciary duty
The non-executive chairman of a manufacturing company received allegations that two executive directors were operating a system of false invoicing for goods that had not been supplied to the company, and had failed to raise invoices for the sale of goods to certain customers.
It was also alleged that the directors had authorised the payment of significant development costs to a supplier which were not supported by any documentation or formal contract.
Working in partnership with the company's lawyers, we discovered that the directors had an undisclosed personal interest in a number of companies that were both customers and suppliers of our client. A detailed examination of our client's accounting records revealed the extent of the fraudulent transactions and provided the lawyers with evidence to support an action against the directors for breach of fiduciary duty. The directors were dismissed and the client recovered substantial sums from the parties involved.