UT-2024-000019 - [2025] UKUT 00257 (TCC)

As regards the intercompany loan between DFL and AF Reprographics Ltd (“AFR”), AP says that she has a very limited knowledge of the loan but her understanding at the time was that the loan was made to ensure that AFR continued to trade, as it was in DFL's best interests for it to do so as DFL relied on AFR to produce the engraved gravure cylinders necessary for the printing process at DFL. Whilst there were other gravure cylinder engravers operating at the time, her understanding was that the volume of work put through them by certain customers would mean that they would be very reluctant to deal with a customer's competitor if it meant they could risk losing work from the initial customer. She was not involved in the day to day running of AFR and neither was she involved in any decisions to loan money from DFL to AFR.

Mr Robinson showed AP a debenture given by AFR in favour of DFL. He also showed her exchanges of emails (in which she was copied) which showed bonuses being paid by AFR to CW and two other executives and a later email (in which she was not copied) which showed DFL’s loan being increased to cover these payments.

In January 2016 GK commented to CW and Jimmy Urqhuart that AFR’s assets were significantly below the level of its debt to DFL and he described this as “A massive hit to [DFL] should anything happen to [AFR]”. This was consistent with financial information AP was receiving from Ashgates about AFR, but she never questioned DFL funding AFR.