Scottish motorhome dealer boss banned
The director of a Scottish-based motorhome company has been disqualified for eight years after guaranteeing return prices to customers for their vehicles that could not be met.
St Andrews Motorhomes Limited was incorporated in June 1993 to buy and sell motorhomes in central Scotland. Christine Galloway, from Cupar, Fife, was a director of the company since its incorporation.
The company, however, ceased trading in July 2018 before entering into compulsory liquidation. The insolvency brought the company to the attention of the Insolvency Service, who conducted further enquiries.
It found that between May 2017 and July 2018, St Andrews Motorhomes entered into 32 brokerage agreements, buying customers’ motorhomes and caravans, and offering an agreed return when the vehicles were sold to a third party.
Investigators established, however, that in at least 18 of the 32 agreements, Christine Galloway sold the vehicles to a third party for less than the agreed return price in the brokerage agreement.
Over 20 of the agreements were entered into between January 2018 and May 2018. In this period Christine Galloway knew or ought to have known that the company was insolvent and was unable to pay the agreed return to customers.
Further enquiries established that Christine Galloway entered into new brokerage agreements from May 2017 onwards but used customers’ funds to settle historic liabilities resulting from previous agreements. Following a similar pattern, these historic liabilities accrued from Christine Galloway being unable to meet the agreed return price when the vehicles were sold to a third party.
During the liquidation, customers have claimed losses of just over £660,000 in connection with the 32 agreements. The affected customers also no longer own the vehicles as a result of Christine Galloway’s activities.
In her disqualification undertaking, Christine Galloway did not dispute that she failed to act in the best interests of customers by continuing to enter into brokerage agreements with customers guaranteeing a return price for their vehicles which could not be met.
Rob Clarke, Chief Investigator for the Insolvency Service, said: “Christine Galloway showed a lack of regard for her customers. Not only did she cause hundreds of thousands of pounds of losses, she knowingly put her customers at risk by using funds from new agreements to settle agreements with long-standing customers.
“Eight years is a significant disqualification and Christine Galloway’s ban should serve as a warning to other directors that they risk being removed from the corporate arena if they do not safeguard their customers."
For more information on where and how to sell a motorhome, and to find a trusted dealer, read our essential advice to buying and selling.