[Closed] I think my boss is ripping off the company I work for...

[i] transfers cash out of the business to his own account[/i]

this sounds like fraud as does paying his wife for not working.

You need to check what your legal responsibilities as a director are before anything else.

After that, if what he's doing isn't illegal and the board of directors and shareholders are prepared to tolerate it then there's not much you can do.

All of this must show up in directors remuneration in the annual accounts, though, so it's publicly available?

If I were you, I would be gathering up such information you think is relevant, and getting down to the company lawyers or solicitors, and finding out what your responsibilities are as a director, and what their advice is

God, what an awful position to find yourself in.
I can offer no helpful advice, but I hope you are able to sort this out without affecting your life too much.

Blackmail him.

All of this must show up in directors remuneration in the annual accounts, though, so it's publicly available?

It shows up as directors emoluments. To the outsider it looks like the directors are collectively well paid. The accounts don't break down who gets what. In reality 60% of the emoluments go to him, the rest is split between the other directors.

your responsibilities are as a director

That might be key.
Best see a solicitor if I were you.

Is the company solvent or could it be classed as insolvent? HMRC?

Are the company accounts in good shape? Sloshing that kind of money around could be doing damage - not many companies will stand rivers of money sluicing out of them.

Is there a reserves policy and are there reserves in the bank?

If you can find something boring that gets the other directors / shareholders to ask the right questions it will come out by itself.

Sounds like a crap situation and I don't blame you for feeling peeved.
First off, print ^ off and send it to HMRC along with his name and the company name/address. If there's anything fishy they'll find it.

If I were you, I would be gathering up such information you think is relevant, and getting down to the company lawyers or solicitors, and finding out what your responsibilities are as a director, and what their advice is

^This

Cover your own arse first!

Would the company fold without the MD, is it highly profitable, would other peoples jobs be at risk if he went?

Are you a director in the companies house sense of the word, or is it a job title? The difference will be crucial.

SNAP! This sounds so familiar, in a very, very similar situation here.
Good luck with it, whichever way to chose to deal with it. Would love to have an update!

In reality 60% of the emoluments go to him, the rest is split between the other directors.

60% to the man doing the job and 40% to silent directors doesn't sound too bad.

As above. Get some real facts, account statements etc. Go and see a lawyer. Next step will depend on their advice but if you decide to contact the other shareholders (I would) then you should do that face to face via a confidential meeting probably with your solicitor present.

This will be a total sh-t show, the MD is going to go balastic. You need to be prepared for that, you could well come out of this very nicely with other shareholders giving you shares / more senior position / big payrise etc. It could end in a train smash with you out of a job and being sued.

Company accounts are usually public and should include a breakdown of the remuneration and dividends paid. I'd seek a full copy of the company accs as filed to Companies House. After that if the shareholders are happy with the remuneration paid then all's fine.

Sounds like he's preparing for a cushy retirement to me...

I've seen a couple of guys (my former boss's) start up a company with the financial backing of a successful parent company. They drew up silly contracts for themselves then screwed the parent company over 5 years, then left with a cushy (12month) severance package! I know they've done nothing illegal, but it was morally very wrong, and friends have lost jobs over it. 🙁 To be fair, the parent company should have read their contracts better, but they where taken in by the enthusiasm of the two guys starting the new company.

I'd check where you stand and then drop him in it. he sounds like he deserves it if nothing else....

Are you a director in the companies house sense of the word, or is it a job title? The difference will be crucial.

+1, that's key.

60% to the man doing the job and 40% to silent directors doesn't sound too bad.

To clarify the 40% goes to people working for the company who are directors, myself included.

There's a difference between shareholder and director.

I am a director of the company with companies house, but i am not shareholder.

The company is solvent and profitable.

I am a director of the company with companies house, but i am not shareholder.

Gather the info you need and go see a solicitor before doing anything else

[i]Gather the info you need and go see a solicitor before doing anything else [/i]

Do this.

You need to understand that your responsibilities are to the company as a legal body, not the shareholders however much you like and respect them.

i'd be doing something similar to what Jambalaya suggests.

I wonder if a union would help in understanding your options?
http://www.unitetheunion.org/how-we-help/legalservices/

Awful situation. I'm sorry to read that you're in this position.

First of all, a directorship isn't ever to be treated as an honorary title. You've responsibilities to ensure that things are done properly and if they aren't, then you have a duty as a whistleblower.

As others have suggested, legal advice is paramount.

Hope it all works out for the best, keep us updated.

Ouch.
As you are a Director in the Statutory sense, you need to be very clear about your responsibilities under the Companies Acts. There are lots, but key ones which matter here:
> Exercising of reasonable care and diligence. You're concerned, so you have to act.
> Responsibility to maintain the books and records of the company. Even if your not the FD, you're still responsible for the numbers. So, if he's at it, consequences fall on you too.

Those are just the headlines. First port of call - get a copy of his employment contract and see if there's a difference between what he's doing and his contract. Only then will you know if there is anything to be concerned about.

Gather the info you need and go see a solicitor before doing anything else

Do this.

You need to understand that your responsibilities are to the company as a legal body, not the shareholders however much you like and respect them.

Definitely this.

By the sounds of the figures involved the company must have a significant turnover and as a result subject to audited accounts. The directors salaries, bonuses, loan accounts etc would have to be disclosed in the financial statements by law. The auditor would have to give their verdict on the financial statements of the company and any suspicion of fraud.
Most likely the other 90% share holders are happy enough to get dividends from the company whilst doing nothing. The fact they could be getting more dividends if a better director was in place is probably too much hassle for them to take on that could rock their comfortable boat.

It's difficult, nothing he's doing is illegal as long as it all ends up in the accounts. As MD he's been appointed by the shareholders to run the business as he sees fit, which he's doing.

Unfortunately it seems he's using the fact that the shareholders are either unable to have over-sight because of illness or it seems don't mind as long as they see some income out of it. If they've got any sense they'll be carefully reviewing the accounts, and MI to ensure their investment / nest egg is being looked after.

You could speak to the shareholders, ask them if they're aware of the way the company is being run - they might know, they might not - it seems they're certainly seeing smaller dividends as the company will be less profitable because of the MDs massive income. There's a big danger for you of course, if you go 'telling tales' to the shareholders and they're happy with the MD you could fall out of favour very quickly.

He favours 'arse kissers', particularly women

its not a third world problem you get paid stop bitchin and drink your starbucks coffee ( who are far worse than your boss)

its okay to write this sort of response cos you have temp user name...

start worrying about something worth while...

next please

Collect all the evidence, make copies put in locker at train station with instructions to be opened on the event of disappearance, confront him with it in a private meeting and demand in on the action!

(this strategy does carry ome risk of prison/murder/ostracisation)

[i]You need to understand that your responsibilities are to the company as a legal body, not the shareholders however much you like and respect them.[/i]

This, before anything else.

If it's all legally accounted for (ie Directors Loans are declared on the books) then all you've really got is FIFO (Fit In or F*** Off).

If it isn't legal then you need to take Legal advice - Company Secretary would be a good start.

he's at least guilty of tax evasion if he's paying his missus a salary and she does nothing for it, surely?
probably difficult to prove though.

Admin - Different temp login for my peace of mind.

A word to the wise, posting from work might not be the brightest idea as it may well appear in your proxy logs.

what industry is the business in? i'm obviously in the wrong game!

posting from work might not be the brightest idea as it may well appear in your proxy logs.

Yes, go to the bogs with your phone.

Company accounts are usually public and should include a breakdown of the remuneration and dividends paid.

All depends on the company size as to how much detail there will be.

Who's the FD (is it you?) and can you trust them?
Failing that may I reiterate the suggestion of some legal advice - and perhaps a back up plan for when it gets messy?

You have my sympathies, it must be a horrible situation to be in.

Whilst at the solicitors, make sure you discuss whistleblower protection within employment law.

his package is enormous

Teee heee heee. Sorry, I have nothing else useful to add.

If the chairman has dementia he may have signed a power of attorney to get somebody else to act on his behalf. I would check with either his family or the company lawyer as this may enable you to use this as a reason to contact those not not directly involved in the day to day running and get them to start becoming more active and hold the MD to account. Also if the chairman hasn't appointed somebody to act on his behalf then as a director you should be insisting that this is done to protect the company.

Do the other shareholders or Directors know his wife is on the payroll but doesn't actual come in/do any work.

Could he comeback and say 'she works from home on a contract/freelance basis' if challenged?

This is where he will fall down.

As for everything else he is siphoning funds. Its the same as creating false invoices/paying bills that don't exist. Concealing where the companies money goes is wrong. If the other shareholders caught wind of this and you HAD NOT told them- how do you think it'll appear to them?

The fact that you've uncovered this means you must tell someone.

An anonymous letter to each should do it around his wife's 'employment' with the company. If only say 4 people know about her pay then he can't pin the blame fairly on you.

With luck he'll be focused on- then an anon letter detailing the serious amounts of money can be circulated.

Then he'll be out of the door very quickly. so you wont have to worry.

You're other choice is do absolutely nothing. He'll screw the company into the ground. People will lose their income, their rightful ownership and he'll walk away with the proceeds of his actions.

I think his wifes salary will be his downfall.

Did you talk to the company accountant already?

Have you got 10 months wages in the bank saved and not needed if yes make the call if not save up then make the call. Cover the bases first. Meet the other share holders first and relay your fears but take a witness.

As others have pointed out as a director you have a responsibility within the law .

I've read done shit advice in my time, and my god a lot of it is up there^^^.

If you're taking legal advice, then I suggest you do so in your personal capacity from independent lawyers. Ask a reputable bunch who will know a damned sight more about your fiduciary duties than our fellow posters. Whoever said you only owe responsibilities to the company and not the shareholders is giving rather reckless advice.

Get advice on (1) your duties as a director and (2) whistleblower protection if they think there's any case to answer. If there is, then next stop are the auditors (if you think they're competent, or some decent forensic accountants if you don't).

This is the problem with private companies - because the transparency of traded companies isn't there, they're often open to potentially more questionable behaviour.

Ourmaninthenorth is right, lots of garbage being spouted here esp from hora

There doesnt appear to be anything illegal going on from the description given, but the devil will be in the detail.

Everyone may be perfectly fine with these arrangements, but then again they may not. You need to decide if its worth rocking the boat about, because if these arrangements are agreed with all the shareholders, you'll probably very quickly find yourself out on your ear.

If they dont know, then theyll probably be very grateful. Tough posiion to be in. Can you have an informal chat with the friendlest shareholder and work out which way the wing is blowing

There are many assumptions made by the OP. The MD could be informing the shareholders of the extra payments and if the company is making a good profit and the shareholders getting dividends paid they might not care.

Also a lot depends on the size (turnover/profit) of the company in relation to the payments he's making to himself. A lot of assumptions. The OP obviously doesn't like the MD and that can sometimes lead to assumptions.

I'd tread very carefully without full knowledge. There are more privately held companies work like this than you'd think. I know plenty.

Are there any other Directors othern than you and your Boss ? If so, what are their opinions ? If the other Director's feel the same as you, raising it at the next board meeting would be a good start.

The OP sounds like a non exec director? So maybe doesn't attend board meetings?

I'd also check that your Director liability insurance is up to date.....

pretty much this exact thing happened to my dad's old company. the boss ended up ****ing the business, making about 200 people redundant, took their pension contributions, investigated for fraud and went missing.
nice.

Hire a duck expect to hear a quack? I offered an opinion based on common sense. I never said I was Julian S Minshire, Ace Lawyer to the Stars..

The company is solvent and profitable.

The question is, is the OP really a director at all? If he is, then he, and the other directors, have the power to decide how the company spends it's loot. It cannot be decided by the MD alone.

My first thoughts were to say suck it up buttercup & that's life, but having just re-read the first post & picked up on the fact that the chairman & major shareholder has dementia. I can see that the minor shareholders may just be happy to receive dividends, but would i be correct in assuming that said dividends aren't as big as they should be because MD is overpaying himself in various ways but the chairman is not aware of what is going on?
I think you need to ascertain how aware the other shareholders including the chairman or his dependents are of the situation, after seeking legal advice.

Tell his wife about the affairs.

[url= https://www.gov.uk/whistleblowing/overview ]Have a look at this[/url]

tonyg2003 - Member
The OP sounds like a non exec director? So maybe doesn't attend board meetings?

Eh, thats essentially "all" that a non-exec director does! Basically a non-exec is a director who is not employed full time by the company and is there to ensure good governance of the business!

but having just re-read the first post & picked up on the fact that the chairman & major shareholder has dementia.

Before getting carried away, if he is overpaying himself then the shareholders are the ones losing out. The first question - are they aware of how much is being paid out and loaned to him? They should, unless it is a small company for Companies Act purposes, which sounds unlikely, as this will require disclosure in the financial statements. The highest paid director's emoluments have to be disclosed which would mean it should be clear how much he is taking out.If this has not been done, you, the Board, are collectively responsible for the financial statements. Loans also need to be disclosed. Therefore the accounts are your first port of call. If you find interpreting accounts difficult, then either get some training or reconsider whether you are comfortable with having a director's responsibilities.

If you are uncomfortable with the disclosure in the accounts then you need to consider the next best steps. However, get the facts first.

Pcaw.org.UK may be useful for some free legal advice

A lot of the advice here is indeed laughable, and one or two of the usual suspects are excelling themselves.

But I have 2 thoughts.

1) If the MD were to start up on his own, would his company be as successful and what would happen to the shareholders of this company? I guess they would be left with nothing.

2) Have you considered blackmail?

He is not doing anything illegal, but I do feel he is acting immorally.

I work for a not dissimilar company and although I'm satisfied that nowadays eveything is run correctly, it wasn't always the case and when the founder was alive and functioning as Chairman 20 years ago there were some truly odd and slightly worrying thigs going on amongst his family and the directors. One director who saw himself as the inheritor overstepped the mark even for the Chairman, who sacked him. There's history there that would fill a decent-sized book but I would NEVER dare bring it up in any way, people are just too sensitive about this kind of thing. When the company was much smaller and less transparent in the way it was run that was the culture and any attempt to challenge it would have resulted in instant dismissal, I'm sure. Many of us benefited; the Chairman had a love-nest in a posh block in Chelsea and a few of us had keys and permission to use it for weekends in Town.

So as others have advised, handle with kid gloves and be very sure of your ground before challenging the bloke as you have no idea what private agreements are in place or what history exists.

the Chairman had a love-nest in a posh block in Chelsea and a few of us had keys and permission to use it

😯

Just the flat, or the contents too?

I would not be posting on here in the first instance and secondly I would be making an appointment with your solicitor first thing in the morning. There sounds like things that would be of interest to HMRC here. You are an officer of this company and your first duty is to the shareholders collectively and not you own self interest that appears to be your main concern.

Are you a Company Director with fiduciary responsibilities?

If so, you need to review the Shareholder's agreement/ Reserved Matters table & take action I think. (You will incur personal liability if you don't)

If you are not a Company Director I'd suggest you track down the Shareholders & dob the **** in.

If he disappears with the money, and then the company goes under, what position will you be in bearing in mind that you knew that this was going on?