Natwest refusing sight of account to my dad

[purp751]

Sorry for poor title,

have to be a little careful on how I post this due to his current situation,

 

long story short,

 

my dad retired from his company about 3 years ago, but is still 60% share holder,

he provided security in the form of property he owns to Natwest for loans taken out while he was with the business,

 

since he has left his ex partners have caused all sorts of problems

and he wishes to completely leave the business and disassociate himself with it

 

he needs to sort out the security with Natwest to do this,

 

Natwest will not deal with him regarding it as he is no longer a signatory on the account,

his ex partners will not provide the information either and it is thought that they have quite possibly

borrowed more money against the security without his consent,

 

again unless Natwest will grant him access then there is no way to prove it,

 

is there any way to get Natwest to produce the information required?

 

thanks purp

[DonkeyB]

NatWest are correct – as a shareholder, your father has no right to contact the bank directly. Shareholders usually appoint the directors to carry out the company’s activities, to make a profit, and to take on the legal burden.

 

But, of course, with this power come responsibilities, and one of the recourses your father has is to use The Companies Act.

 

By law, a shareholder can demand sight of the accounts and associated paperwork – as your father is a majority shareholder, this cannot be denied to him.

 

Long term, his only recourse to get out (once he has solved the problem of security) is to sell his shareholding or to wind up the company. You might also want to look at issues of misfeasance if the current directors are behaving badly, not in the best interests of the company, or against the Companies Act.

 

Some elements will depend on the company’s articles, but I strongly suggest he sees a solicitor specialising in company law. Hundreds of the b*ggers around.

Edited August 19, 2013 by DonkeyB

[Surfer01]

If he is still responsible for loans taken out while he was working, and if they are now defaulted, Natwest can go after him so surely he should have access to these records as he is the guarantor?

[DonkeyB]

A lot depends on the agreement, but generally a guarantor has very few rights – the role is simply to pay any debts that are not paid when due by the company or individual under the guarantee. It’s like a personal guarantee, but for a third party.

 

There are lots of actions he can take with such a large shareholding, such as calling an EGM, but I don’t think he would be allowed access to, for example, board meeting minutes – only accounts details.

 

It seems clear that the relationship with the directors has broken down, so he could look at a number of ‘tricks’. Unless he has delegated his shareholder power, why not call an EGM and vote himself back in as a director? He would then have full access to all documents. Your father should have a copy of the Articles of Association which set out the way the company is run.

 

If your father holds 60% of the ordinary shares, with voting rights, he is considered to be the ‘controller’ of the company in many ways, so he should start throwing his weight around – with the help of a solicitor.

 

So my final advice is to get legal advice – CAG is good, but this is a very specific area of company law that needs the belt-and-braces of a solicitor. Given what’s on the line, it seems like a small price to pay.

[purp751]

If he is still responsible for loans taken out while he was working, and if they are now defaulted, Natwest can go after him so surely he should have access to these records as he is the guarantor?

 

They are not yet defaulted, this is what he is trying to avoid, its all very awkward, the security is aginst property owned by my dad, which is the same property that they rent off my dad as office space, they also have not paid the rent for quite a while, now owe around 14k in unpaid rent, however my dad has been advised not to chase them too hard for this as it may bankrupt them if the figures thier claiming are correct, however it is asumed by all concerned they are fiddling the figures hence why he wants access to hte bank to get a true picture

[DonkeyB]

Well, it’s a no-brainer: he either votes himself back in as a director and straightens things out, or he works with a solicitor. Can’t see any other way to sort it – he has zero rights as a guarantor. That’s why being a guarantor is usually a bit of a daft thing to do when you’re not in control of the situation.