• CHAPTER 9 CHAPTER 9 DISQUALIFICATION OF DIRECTORS

    • 233. Disqualification orders: general

      (1) In the circumstances specified below the Registrar may, and under section shall 238 (duty of Registrar to disqualify unfit directors of insolvent companies), make against a person a disqualification order that, for a period specified in the order —
      (a) he shall not be a director of a company, act as receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has permission to do so from the Registrar, and
      (b) he shall not act as an insolvency practitioner.
      (2) In each section of these Regulations which gives the Registrar the power or, as the case may be, imposes on him the duty to make a disqualification order, there is specified the maximum (and, in section 238 (duty of Registrar to disqualify unfit directors of insolvent companies), the minimum) period of disqualification which may or (as the case may be) must be imposed by means of the order.
      (3) Unless the Registrar otherwise specifies, the period of disqualification so imposed shall begin at the end of the period of 21 days beginning with the date of the order.
      (4) Where a disqualification order is made against a person who is already subject to such an order or to a disqualification undertaking, the periods specified in those orders or, as the case may be, in the order and the undertaking shall run concurrently.
      (5) A disqualification order may be made on grounds which are or include matters other than criminal convictions, notwithstanding that the person in respect of whom it is to be made may be criminally liable in respect of those matters.
      (6) The Registrar may make an order (a "delegation order") for the purpose of enabling functions of the Registrar under this chapter to be exercised by the Financial Services Regulator.
      (7) A delegation order has the effect of transferring to the Financial Services Regulator designated by it all functions of the Registrar under this chapter subject to such exceptions and reservations as may be specified in the order.
      (8) A delegation order may confer on the Financial Services Regulator such other functions supplementary or incidental to those transferred as appear to the Registrar to be appropriate.
      (9) A delegation order may be amended or, if it appears to the Registrar that it is no longer in the public interest that the order should remain in force, revoked by a further order under this section.
      (10) Where functions are transferred or resumed, the Registrar may by order confer or, as the case may be, take away such other functions supplementary or incidental to those transferred or resumed as appear to him to be appropriate.

    • 234. Disqualification undertakings: general

      (1) In the circumstances specified in sections 239 (disqualification order or undertaking; and reporting provisions) and 240 (disqualification of persons unfit to be directors) the Registrar may accept a disqualification undertaking, that is to say an undertaking by any person that, for a period specified in the undertaking, the person—
      (a) will not be a director of a company, act as receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has permission to do so from the Registrar, and
      (b) will not act as an insolvency practitioner.
      (2) The maximum period which may be specified in a disqualification undertaking is 15 years, and the minimum period which may be specified in a disqualification undertaking under section 239 (disqualification order or undertaking; and reporting provisions) is two years.
      (3) Where a disqualification undertaking by a person who is already subject to such an undertaking or to a disqualification order is accepted, the periods specified in those undertakings or (as the case may be) the undertaking and the order shall run concurrently.
      (4) In determining whether to accept a disqualification undertaking by any person, the Registrar may take account of matters other than criminal convictions, notwithstanding that the person may be criminally liable in respect of those matters.

    • 235. Disqualification on conviction of criminal offence

      (1) The Registrar may make a disqualification order against a person where he is convicted of a criminal offence in the United Arab Emirates in connection with the promotion, formation, management, liquidation or striking off of a company with the receivership of a company's property or with his being an administrative receiver of a company.
      (2) The maximum period of disqualification under this section is 15 years.

    • 236. Disqualification for persistent breaches of companies legislation

      (1) The Registrar may make a disqualification order against a person if it is satisfied that he has been persistently in default in relation to provisions of any law or regulation in the Abu Dhabi Global Market requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the Registrar.
      (2) The maximum period of disqualification under this section is 15 years.

    • 237. Disqualification for fraud, etc.

      (1) The Registrar may make a disqualification order against a person if it is satisfied that he—
      (a) has been guilty of breach of section 857 (fraudulent trading), or
      (b) has otherwise committed, while an officer or liquidator of the company receiver of the company's property or administrative receiver of the company, any fraud in relation to the company or any breach of his duty as such officer, liquidator, receiver or administrative receiver.
      (2) The maximum period of disqualification under this section is 15 years.

    • 238. Duty of Registrar to disqualify unfit directors of insolvent companies

      (1) The Registrar shall make a disqualification order against a person in any case where it is satisfied—
      (a) that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and
      (b) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company.
      (2) For the purposes of this section and section 239 (disqualification order or undertaking; and reporting provisions), a company becomes insolvent if—
      (a) the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,
      (b) the company enters administration,
      (c) an administrative receiver of the company is appointed,
      and references to a person's conduct as a director of any company or companies include, where that company or any of those companies has become insolvent, that person's conduct in relation to any matter connected with or arising out of the insolvency of that company.
      (3) In this section and section 239 (disqualification order or undertaking; and reporting provisions), "director" includes a shadow director.
      (4) Under this section the minimum period of disqualification is 2 years, and the maximum period is 15 years.

    • 239. Disqualification order or undertaking; and reporting provisions

      (1) A disqualification order under section 243 (participation in wrongful trading) shall not be made after the end of the period of 2 years beginning with the day on which the company of which that person is or has been a director became insolvent.
      (2) If it appears to the Registrar that the conditions mentioned in section 234(1) (disqualification undertakings: general) are satisfied as respects any person who has offered to give a disqualification undertaking, it may accept the undertaking if it appears to the Registrar that it is expedient in the public interest that it should do so (instead of making a disqualification order).
      (3) If it appears to the office-holder responsible under this section, that is to say—
      (a) in the case of a company which is being wound up, the liquidator or provisional liquidator,
      (b) in the case of a company which is in administration, the administrator, or
      (c) in the case of a company of which there is an administrative receiver, that receiver,
      that the conditions mentioned in section 238(1) (duty of Registrar to disqualify unfit directors of insolvent companies) are satisfied as respects a person who is or has been a director of that company, the office-holder shall forthwith report the matter to the Registrar.
      (4) The Registrar may require the liquidator, provisional liquidator, administrator or administrative receiver of a company, or the former liquidator, provisional liquidator, administrator or administrative receiver of a company—
      (a) to furnish him with such information with respect to any person's conduct as a director of the company, and
      (b) to produce and permit inspection of such books, papers and other records relevant to that person's conduct as such a director,
      as the Registrar may reasonably require for the purpose of determining whether to exercise, or of exercising, any of its functions under this section.

    • 240. Disqualification of persons unfit to be directors

      (1) The Registrar may make a disqualification order against a person who is, or has been, a director or shadow director of a company, where it is satisfied that his conduct in relation to the company makes him unfit to be concerned in the management of a company and it is in the public interest to make the order.
      (2) Where it appears to the Registrar that, in the case of a person who has offered to give a disqualification undertaking—
      (a) the conduct of the person in relation to a body corporate of which the person is or has been a director or shadow director makes him unfit to be concerned in the management of a company, and
      (b) it is in the public interest that he should accept the undertaking (instead of making a disqualification order),
      it may accept the undertaking.
      (3) The maximum period of disqualification under this section is 15 years.

    • 241. Variation etc. of disqualification undertaking

      The Registrar may, on the application of a person who is subject to a disqualification undertaking—

      (a) reduce the period for which the undertaking is to be in force, or
      (b) provide for it to cease to be in force.

    • 242. Matters for determining unfitness of directors

      (1) Where it falls to the Registrar to determine whether a person's conduct as a director of any particular company or companies makes him unfit to be concerned in the management of a company, the Registrar shall, as respects his conduct as a director of that company or, as the case may be, each of those companies, have regard in particular—
      (a) to the matters mentioned in Part I of Schedule 2 to these Regulations, and
      (b) where the company has become insolvent, to the matters mentioned in Part II of that Schedule,
      and references in that Schedule to the director and the company are to be read accordingly.
      (2) In determining whether it may accept a disqualification undertaking from any person the Registrar shall, as respects the person's conduct as a director of any company concerned, have regard in particular—
      (a) to the matters mentioned in Part I of Schedule 2 to these Regulations, and
      (b) where the company has become insolvent, to the matters mentioned in Part II of that Schedule,
      and references in that Schedule to the director and the company are to be read accordingly.
      (3) Section 238(2) applies for the purposes of this section and Schedule 2 as it applies for the purposes of section 238(duty of Registrar to disqualify unfit directors of insolvent companies) and 239 (disqualification order or undertaking; and reporting provisions) and in this section and that Schedule "director" includes a shadow director.
      (4) The Board may make rules modifying any of the provisions of Schedule 2, and such rules may contain such transitional provisions as may appear to the Board to be necessary or expedient.

    • 243. Participation in wrongful trading

      (1) Where the Court makes a declaration under Part 4 (protection of assets in liquidation and administration) of the Insolvency Regulations 2015 that a person is liable to make a contribution to a company's assets, the Registrar may, if it thinks fit, make a disqualification order against the person to whom the declaration relates.
      (2) The maximum period of disqualification under this section is 15 years.

    • 244. Penalties

      If a person acts in contravention of a disqualification order or disqualification undertaking, he shall be liable to a fine of up to level 5.

    • 245. Breach by a body corporate

      (1) Where a body corporate is acts in contravention of a disqualification order or disqualification undertaking, and it is proved that the contravention occurred with the consent or connivance of, or was attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity he, as well as the body corporate, commits the contravention and is liable to be proceeded against and punished accordingly.
      (2) Where the affairs of a body corporate are managed by its members, subsection (1) applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

    • 246. Personal liability for company's debts where person acts while disqualified

      (1) A person is personally responsible for all the relevant debts of a company if at any time—
      (a) in contravention of a disqualification order or disqualification undertaking he is involved in the management of the company, or
      (b) as a person who is involved in the management of the company, he acts or is willing to act on instructions given without the permission of the Registrar by a person whom he knows at that time—
      (i) to be the subject of a disqualification order made or disqualification undertaking accepted under these Regulations, or
      (ii) to be an undischarged bankrupt.
      (2) Where a person is personally responsible under this section for the relevant debts of a company, he is jointly and severally liable in respect of those debts with the company and any other person who, whether under this section or otherwise, is so liable.
      (3) For the purposes of this section the relevant debts of a company are—
      (a) in relation to a person who is personally responsible under subsection (1)(a), such debts and other liabilities of the company as are incurred at a time when that person was involved in the management of the company, and
      (b) in relation to a person who is personally responsible under subsection(1)(b), such debts and other liabilities of the company as are incurred at a time when that person was acting or was willing to act on instructions given as mentioned in that subsection.
      (4) For the purposes of this section, a person is involved in the management of a company if he is a director of the company or if he is concerned, whether directly or indirectly, or takes part, in the management of the company.
      (5) For the purposes of this section a person who, as a person involved in the management of a company, has at any time acted on instructions given without the permission of the Registrar by a person whom he knew at that time—
      (a) to be the subject of a disqualification order made or disqualification undertaking accepted under these Regulations, or
      (b) to be an undischarged bankrupt,
      is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given by that person.

    • 247. Proposal to make disqualification order

      (1) If the Registrar proposes to make a disqualification order against a person, it must give him a warning notice.
      (2) A warning notice must state the period of disqualification under the proposed disqualification order.

    • 248. Decision notice

      (1) If the Registrar decides to make a disqualification order against a person, it must without delay give him a decision notice.
      (2) The decision notice must state the period of disqualification under the disqualification order.
      (3) If a Registrar decides to make a disqualification order against a person, that person may refer the matter to the Court.

    • 249. Statements of policy

      (1) The Registrar must prepare and issue a statement of its policy with respect to—
      (a) the making of disqualification orders under this Part; and
      (b) the acceptance of disqualification undertakings under this Part.
      (2) The Registrar may at any time alter or replace a statement issued by it under this section.
      (3) If a statement issued under this section is altered or replaced by the Registrar, the Registrar must issue the altered or replacement statement.
      (4) The Registrar must, without delay, give the Board a copy of any statement which it publishes under this section.
      (5) A statement issued under this section by the Registrar must be published by the Registrar in the way appearing to the Registrar to be best calculated to bring it to the attention of the public.
      (6) In exercising, or deciding whether to exercise its power under this Part, the Registrar must have regard to any statement published by it under this section and in force at the time when the conduct giving rise to the exercise of its power under this Part occurred.
      (7) The Registrar may charge a reasonable fee for providing a person with a copy of the statement.

    • 250. Statements of policy: procedure

      (1) Before the Registrar issues a statement under section 249 (statements of policy), the Registrar must publish a draft of the proposed statement in the way appearing to the Registrar to be best calculated to bring it to the attention of the public.
      (2) The draft must be accompanied by notice that representations about the proposal may be made to the Registrar within a specified time.
      (3) Before issuing the proposed statement, the Registrar must have regard to any representations made to it in accordance with subsection (2).
      (4) If the Registrar issues the proposed statement it must publish an account, in general terms, of—
      (a) the representations made to it in accordance with subsection (2); and
      (b) its response to them.
      (5) If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the Registrar, significant, the Registrar must (in addition to complying with subsection (4)) publish details of the difference.
      (6) The Registrar may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
      (7) This section also applies to a proposal to alter or replace a statement.

    • 251. Warning notices

      (1) A warning notice must—
      (a) state the action which the Registrar proposes to take;
      (b) be in writing;
      (c) give reasons for the proposed action;
      (d) state whether section 257 (access to material) applies; and
      (e) if that section applies, describe its effect and state whether any secondary material exists to which the person receiving the notice must be allowed access under it.
      (2) A warning notice must specify a reasonable period (which may not be less than 14 days) within which the person to whom it is given may make representations to the Registrar.
      (3) The Registrar may extend the period specified in the notice.
      (4) The Registrar must then decide, within a reasonable period, whether to give the person receiving the warning notice a decision notice.

    • 252. Decision notices

      A decision notice must—

      (a) be in writing;
      (b) give the reasons of the Registrar for the decision to take the action to which the notice relates;
      (c) state whether section 257 (access to material) applies;
      (d) if that section applies, describe its effect and state whether any secondary material exists to which the person receiving the notice must be allowed access under it; and
      (e) give an indication of—
      (i) any right to have the matter referred to the Court which is given by these Regulations; and
      (ii) the procedure on such a reference.

    • 253. Notices of discontinuance

      (1) If the Registrar decides not to take—
      (a) the action proposed in a warning notice given by it, or
      (b) the action to which a decision notice given by it relates,
      it must give a notice of discontinuance to the person to whom the warning notice or decision notice was given.
      (2) A notice of discontinuance must identify the proceedings which are being discontinued.

    • 254. Appeals

      (1) A person may appeal to the Court from any decision of the Registrar to issue a decision notice to him under section 252 (decision notices).
      (2) If notice of appeal is given against a decision notice, the effect of the Registrar's notice is suspended.
      (3) On appeal the Court may (as the case may require) specify the terms of the final notice to be issued under section 255 (final notices), remit the matter to the Registrar or make any order or determination that the Registrar might have made.

    • 255. Final notices

      (1) If the Registrar has given a person a decision notice and the matter was not referred to the Court within 28 days, the Registrar must, on taking the action to which the decision notice relates, give such person and any person to whom the decision notice was copied a final notice.
      (2) If the Registrar has given a person a decision notice and the matter was referred to the Court within 28 days, the Registrar must, on taking action in accordance with any directions given by the Court give that person and any person to whom the decision notice was copied a notice required by subsection (3).
      (3) The notice required by this subsection is—
      (a) in a case where the Court has upheld an appeal against a decision notice, a discontinuation notice, and
      (b) in any other case, a final notice.
      (4) A final notice must state the period of disqualification under the disqualification order.

    • 256. Third party rights

      (1) If any of the reasons contained in a warning notice relates to a matter which—
      (a) identifies a person ("the third party") other than the person to whom the notice is given, and
      (b) in the opinion of the Registrar, is prejudicial to the third party,
      a copy of the notice must be given to the third party.
      (2) Subsection (1) does not require a copy to be given to the third party if the Registrar—
      (a) has given him a separate warning notice in relation to the same matter; or
      (b) gives him such a notice at the same time as it gives the warning notice which identifies him.
      (3) The notice copied to a third party under subsection (1) must specify a reasonable period (which may not be less than 14 days) within which he may make representations to the Registrar.
      (4) If any of the reasons contained in a decision notice to which this section applies relates to a matter which—
      (a) identifies a person ("the third party") other than the person to whom the decision notice is given, and
      (b) in the opinion of the Registrar, is prejudicial to the third party,
      a copy of the notice must be given to the third party.
      (5) If the decision notice was preceded by a warning notice, a copy of the decision notice must (unless it has been given under subsection (4)) be given to each person to whom the warning notice was copied.
      (6) Subsection (4) does not require a copy to be given to the third party if the Registrar—
      (a) has given him a separate decision notice in relation to the same matter; or
      (b) gives him such a notice at the same time as it gives the decision notice which identifies him.
      (7) Neither subsection (1) nor subsection (4) requires a copy of a notice to be given to a third party if the Registrar considers it impracticable to do so.
      (8) Subsections (9) to (11) apply if the person to whom a decision notice is given has a right to refer the matter to the Court.
      (9) A person to whom a copy of the notice is given under this section may refer to the Court—
      (a) the decision in question, so far as it is based on a reason of the kind mentioned in subsection (4); or
      (b) any opinion expressed by the Registrar in relation to him.
      (10) The copy must be accompanied by an indication of the third party's right to make a reference under subsection (9) and of the procedure on such a reference.
      (11) A person who alleges that a copy of the notice should have been given to him, but was not, may refer to the Court the alleged failure and—
      (a) the decision in question, so far as it is based on a reason of the kind mentioned in subsection (4); or
      (b) any opinion expressed by the Registrar in relation to him.
      (12) Section 257 (access to material) applies to a third party as it applies to the person to whom the notice to which this section applies was given, in so far as the material to which access must be given under that section relates to the matter which identifies the third party.
      (13) A copy of a notice given to a third party under this section must be accompanied by a description of the effect of section 257 (access to material) as it applies to him.
      (14) Any person to whom a warning notice or decision notice was copied under this section must be given a copy of a notice of discontinuance applicable to the proceedings to which the warning notice or decision notice related.

    • 257. Access to material

      (1) If the Registrar gives a person ("A") a warning notice or a decision notice, it must—
      (a) allow him access to the material on which it relied in taking the decision which gave rise to the obligation to give the notice;
      (b) allow him access to any secondary material which, in the Registrar's opinion, might undermine that decision.
      (2) But the Registrar does not have to allow A access to material under subsection (1) if the material is excluded material or it—
      (a) relates to a case involving a person other than A; and
      (b) was taken into account by the Registrar in A's case only for purposes of comparison with other cases.
      (3) The Registrar may refuse A access to particular material which it would otherwise have to allow him access to if, in its opinion, allowing him access to the material—
      (a) would not be in the public interest; or
      (b) would not be fair, having regard to—
      (i) the likely significance of the material to A in relation to the matter in respect of which he has been given a notice; and
      (ii) the potential prejudice to the commercial interests of a person other than A which would be caused by the material's disclosure.
      (4) If the Registrar does not allow A access to material because it is excluded material consisting of a protected item, it must give A written notice of—
      (a) the existence of the protected item; and
      (b) the Registrar's decision not to allow him access to it.
      (5) If the Registrar refuses under subsection (3) to allow A access to material, it must give him written notice of—
      (a) the refusal; and
      (b) the reasons for it.
      (6) "Secondary material" means material, other than material falling within subsection (1)(a) which—
      (a) was considered by the Registrar in reaching the decision mentioned in that subsection; or
      (b) was obtained by the Registrar in connection with the matter to which that notice relates but which was not considered by it in reaching that decision.
      (7) "Excluded material" means material which is a protected item (as defined in section 260 (protected items).

    • 258. The Registrar's procedures

      (1) The Registrar must determine the procedure that it proposes to follow in relation to a decision which gives rise to an obligation for it to give a warning notice or decision notice.
      (2) That procedure must be designed to secure, among other things, that a decision falling within subsection (1) is taken—
      (a) by a person not directly involved in establishing the evidence on which the decision is based, or
      (b) by 2 or more persons who include a person not directly involved in establishing that evidence.
      (3) The Registrar must issue a statement of its procedure.
      (4) The statement must be published in the way appearing to the Registrar to be best calculated to bring the statement to the attention of the public.
      (5) The Registrar may charge a reasonable fee for providing a person with a copy of the statement.
      (6) The Registrar must, without delay, give the Board a copy of the statement.
      (7) When the Registrar gives a warning notice or decision notice, the Registrar must follow its stated procedure.
      (8) If the Registrar changes its procedure in a material way, it must publish a revised statement.
      (9) The Registrar's failure in a particular case to follow its procedure as set out in the latest published statement does not affect the validity of a notice given in that case.
      (10) But subsection (9) does not prevent the Court from taking into account any such failure in considering a matter referred to it.

    • 259. Statements under section 258: consultation

      (1) Before issuing a statement of its procedure under section 258 (the Registrar's procedures), the Registrar must publish a draft of the proposed statement in the way appearing to it to be best calculated to bring the draft to the attention of the public.
      (2) The draft must be accompanied by notice that representations about the proposal may be made to the Registrar within a specified time.
      (3) Before the Registrar issues the proposed statement of its procedure, it must have regard to any representations made to it in accordance with subsection (2).
      (4) If the Registrar issues the proposed statement of its procedure, it must publish an account, in general terms, of—
      (a) the representations made to it in accordance with subsection (2); and
      (b) its response to them.
      (5) If the statement of the Registrar's procedure differs from the draft published by it under subsection (1) in a way which is, in its opinion, significant, it must (in addition to complying with subsection (4)) publish details of the difference.
      (6) The Registrar may charge a reasonable fee for providing a person with a copy of the draft published under subsection (1).
      (7) This section also applies to a proposal to revise a statement of policy.

    • 260. Protected items

      (1) A person may not be required under these Regulations to produce, disclose or permit the inspection of protected items.
      (2) "Protected items" means—
      (a) communications between a professional legal adviser and his client or any person representing his client which fall within subsection (3);
      (b) communications between a professional legal adviser, his client or any person representing his client and any other person which fall within subsection (3) (as a result of subsection(3)(b));
      (c) items which—
      (i) are enclosed with, or referred to in, such communications;
      (ii) fall within subsection (3); and
      (iii) are in the possession of a person entitled to possession of them.
      (3) A communication or item falls within this subsection if it is made—
      (a) in connection with the giving of legal advice to the client; or
      (b) in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings.
      (4) A communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.

    • 261. Register of disqualification orders and undertakings

      (1) The Registrar shall maintain a register of disqualification orders made under these Regulations, and of cases in which permission is granted by the Registrar for a person subject to a disqualification order to do any thing which otherwise the order prohibits him from doing.
      (2) The Registrar must include in the register such particulars as it considers appropriate of—
      (a) disqualification undertakings accepted by him under sections 239 (disqualification order or undertaking; and reporting provisions) and 240 (disqualification of persons unfit to be directors),
      (b) cases in which permission is granted by the Registrar for a person subject to such an undertaking to do anything which otherwise the undertaking prohibits him from doing.
      (3) When an order or undertaking of which entry is made in the register ceases to be in force, the Registrar shall delete the entry from the register and all particulars relating to it which have been furnished to it under this section or any previous corresponding provision and, in the case of a disqualification undertaking, any other particulars it has included in the register.
      (4) The register shall be open to inspection on payment of such fee as may be specified by the Board in rules made under this section.

    • 262. Admissibility in evidence of statements

      In any proceedings (whether or not under these Regulations), any statement made in pursuance of a requirement imposed by or under these Regulations, or by or under rules made for the purposes of these Regulations under the Insolvency Regulations 2015, may be used in evidence against any person making or concurring in making the statement.