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Transline Group, the employment agency which provides staff to Sports Direct, is preparing for insolvency as it continues to struggle to find investment.
The agency said it was suffering from “tighter margins in the recruitment industry”, but would protect its “business, employees and customers”.
It filed its “notice of intention to appoint an administrator” at a court in Leeds, it has been reported. It will give them 10 days to secure financial stability or begin liquidating the company.
The ‘notice of intention to appoint an administrator’ provides creditors with notice that there is a chance or prospect of administration.
In a statement, a Transline spokesperson said: “We are close to securing inward investment that will allow us to drive forward with continued growth and infrastructure development”.
“We expect to hear more regarding potential trading investments imminently.”
In 2015, the group were involved in a Sports Direct scandal after an investigation revealed that its workers were being paid less than the minimum wage and were subject to controversial disciplinary measures.
MPs compared its working practices to those of a “Victorian workhouse”.
The Transline statement said: “[We] have lodged the ‘notice of intention’ to protect the business, our employees and our customers as we complete this process”.
“The welfare of our staff and our relationships with our customers are of paramount importance, and we are continuing our service and operations as normal. We expect to hear more regarding potential trading investments imminently.”
It is important to note that company directors owe certain duties to their company and, if insolvency threatens, to creditors. If a company director breaches his or her insolvency duties, personal liability can result in disqualification, and in extreme cases, criminal prosecution.
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