Has anyone got any ideas of how to deal with this problem?
A company I work for had two directors, one of whom suddenly resigned and left the business in January. He has set up his own business in the same sector, although promised to provide new leads which have not materialised.
He has been criticising the remaining director, both personally and professionally, as well as the company's quality of work to existing clients, and taking those clients in the process. It was found that he had also charged costs to the company for work done outside, and has caused serious cash flow problem.
While we know what he has done, it is not easy to prove, and combatting the "badmouthing" is definitely a real problem.
Any thoughts?
Replies (3)
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Knowing and Acting
If you have "found" that this director has made wrongful charges to the business to his benefit you must therefore have evidence of it so why can't it be proved? As for badmouthing that usually ends up meaning nothing more than "Don't buy their rubbish, buy our rubbish instead."
You do not say but was/is he also a shareholder?
The approach his former company decides to take probably ought to be very much determined by pragmatism, if he is still a shareholder(if he was a shareholder) a fudge re the costs might be the way to go.
It does however go without saying that costs passed through the company for works/contracts not done by the company probably ought not to be treated as company expenses, their vat treatment also needs considered, so as a starting position (if not to be treated as taxable benefits) the amounts paid / incurred possibly ought to be isolated to a loan account.
Once quantum established best course of action may be determined; it may be that forgiveness of the loan may figure in say purchase of his shares (if on point)