THREE directors of a Bournemouth-based credit union, which went into administration owing more than £7million, have received lengthy bans.

Enterprise The Business Credit Union – which traded as DotComUnity Credit Union – went into administration in May 2015. It had an estimated 1,900 members.

Directors Phillip Raymond Neale, 53, and Gillian Birkett, 60, both from Bournemouth, have been banned from creating or running a company for six years following an investigation by the Insolvency Service.

The pair were disqualified for continuing to make new loans despite knowing the company was in financial difficulty and at risk of insolvency.

According to the Insolvency Service investigation the credit union made payments of £635,511.67 in respect of 175 loans between December 2014 and May 2015, which contributed to its insolvency,

Between September 2011 and September 2012, the credit union, which was based in Enterprise House in Oxford Road, was told by the Financial Services Authority not to accept deposits because it had not kept enough capital.

Fellow company director Richard Charles Nichols, 58, from Winchester, was handed a nine year ban for altering a contact between the credit union and a second company he was involved with, which handled almost all the credit unions admin work.

The new contract resulted in the second company charging additional fees of £392,629. It was done without the knowledge of the credit union board.

David Brooks, group leader at the Insolvency Service, said: “In December 2014, Mr Nichols told the Board of EBCU that the company had ‘broken all rules in the book’ and ‘couldn’t continue to flout the rules’.

“However, both he and Mr Neale and Mrs Birkett then allowed the company to do just that, leading directly to its failure. Mr Nichols also allowed a serious conflict of interest to occur regarding a second company, which carried out all almost all administrative functions within the credit union.”

“He then failed to prioritise his duties to EBCU regarding both the agreement of a fee structure with that company and the accurate reporting of the inter-company transactions in its accounts.

“This is serious misconduct and the high tariff of disqualification reflects the seriousness of such behaviour.

“We are grateful for the assistance of the Prudential Regulation Authority, in particular, in this matter.”

All depositors in the credit union were due to be compensated by the Financial Services Compensation Scheme, up to £85,000.