Receiver Tom Kavanagh is expected to apply to the High Court this week for permission to seek orders against the principal shareholder and director of Doherty Advertising under Section 297a of the Companies Acts 1963 and Section 139 of the Companies Act 1990.
In his affidavit, Kavanagh claims that Mark Beggs failed to respond satisfactorily to his queries.
He points out that most of the finance came from Ulster Bank, which supplied loans to Beggs's buy-in vehicle, a company called Craigbury.
The finance was to be secured against cash due from clients of Doherty Advertising under a 75 per cent invoice discounting arrangement. Ulster Bank took possession of the debtors' ledger as security for the loans that it advanced.
When the company went under, Beggs told the receiver that Ђ3.7 million was stated to be due in outstanding debts.
However, only Ђ802,289 had been collected by 18 June last.
