Mortgage Times have today announced that it will no longer be able to conduct regulated business. In an email from the board of Director to all appointed representatives of the mortgage network the following was stated.

"It is with great regret that The Mortgage Times Group Limited, as the authorised person, has applied for a variation of the current permission granted to TMTG pursuant to Part IV of the Financial Services and Markets Act 2000.

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"The variation of permission requested is the addition of a requirement that with effect from 21 December 2009, the Mortgage Times Group Limited may not carry on any of the regulated activities in the permission.

"This means as appointed representatives of The Mortgage Times Group Limited you are no longer permitted to conduct regulated activities under our FSA number 303007 as from today’s date.

"As you will all be aware 2009 has been an extremely turbulent year for TMTG and we have been vigorously attempting to secure investment into the business from strategic business partners to allow us to continue to trade solvently in to 2010.

"We are extremely saddened that at the 11th hour a potential major investor has made the decision not to proceed and we have been left with no alternative but to cease trading.

"We would like to thank all our ARs for their loyalty over the last five years and apologise profusely that we have not been able to continue to provide a platform for you all to continue to trade.

"We assure you that we have left no stone unturned in an attempt to find a solution to our recent difficulties but ultimately have been left with no other options going forward.

"We would like to give you our best wishes for success in the future when this marketplace eventually returns to normality."

R3 is calling for the Insolvency Service to be allocated greater resources to pursue more cases referred to them by Insolvency Practitioners (IPs). Last year, out of the 4,752 referrals by IPs, the Insolvency Service disqualified 1,252 directors, or about 26%. Six years ago 45% of directors were disqualified.

“One in four reports resulting in a disqualification is simply not a high enough strike rate,” says R3 President Peter Sargent. “Insolvency Practitioners are required by law to report on the conduct of the directors of all businesses when they fail. A particular type of report is required when the conduct of the director appears to the IP to warrant further investigation. The Service does a good job to get the disqualifications it secures but clearly needs additional resources to pursue more cases.”

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Under the Directors Disqualification Act, the Insolvency Service can seek a court order for a director to be barred from taking boardroom posts. Most commonly this is for trading when insolvent and the average disqualification period is six and a half years. R3 has been discussing with Parliamentarians and key stakeholders how best to prevent directors making the same mistakes next time round.

Peter Sargent concludes: “We have urged both Government and the opposition to consider introducing compulsory education for disqualified directors. Using a driving analogy, those caught speeding are encouraged to undertake a speed awareness course. Greater publicity for cases the Insolvency Service successfully prosecutes could also act as an additional deterrent, as well as more resources to police those who have been disqualified. Otherwise some ‘dodgy’ directors will simply slip through the net and be allowed to set up shop somewhere else.

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“Companies buying or selling property are being squeezed by a reduction in prices and a shortage of buyers,” said R3’s President, Nick O’Reilly. “A bank trying to recover lost assets will appoint a surveyor which shows up as a Receivership. We have all known for some time that the property and construction sector has been badly hit by the downturn, and these figures are evidence of that.”

Today’s figures indicate that overall, the number of corporate insolvencies for just three quarters of 2008 now stands at 15,164 which is almost as much as the figure cited by R3 for the entire year. In October, R3 members predicted a rise from the official figure of 13,091 corporate insolvencies for 2007 to 15,693 for 2008.

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Rises are expected to continue into 2009 with 18,440 company insolvencies predicted. This would translate as a massive 41% increase in business insolvencies from 2007 to 2009. These predictions were made in a survey of the Insolvency Profession last month in conjunction with the polling agency ComRes.

“The Insolvency Service figures are worse than we expected. However, there will always be a ‘lag’ in filtering through and it won’t be until the end of 2009 that we will start to approach the numbers we saw at the peak of the last recession in 1992.

“For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up. Businesses which are more vulnerable will fail.”

There are also concerns about the reported figures of 27,087 personal insolvencies for this quarter, which marks a jump in the number of bankruptcies and IVAs. “Again, these figures show that Insolvency Practitioner’s predictions of a 22% rise in personal insolvencies between 2007 and 2009 is worryingly on track,” said Nick O’Reilly. “Traditionally the route into personal insolvency is not an overnight process and unsurprisingly people will put off dealing with financial problems until they have exhausted all other options.”

Source: R3, which is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK. www.r3.org.uk