Rise of the ‘Zombie’ directors – 3,500 dead people running UK companies ...Middle East

Thousands of dead people are listed as being ‘active’ directors of British companies in official records, The i Paper can reveal.

Government and anti-fraud campaigners have previously identified so-called “zombie” directors as evidence of lax financial regulation that could allow money laundering, tax evasion and other financial crimes to take place.

The disclosure that so many listed executives are not alive emerged from a Government review into “Economic Crime and Corporate Transparency” published this month which stated that around 3500 directors listed were actually “deceased individuals”.

The report said that while most of the cases are likely to be down to “simple” administrative mistakes, some could also “signal a more serious attempt to mislead”.

The report also detailed how almost 2,000 entities were linked to one address in southeast England, some of which had ties to tax evasion, money laundering and fraud.

Liam Byrne MP, Chair of the House of Commons Business and Trade Committee, described the disclosures as “not just absurd” but “dangerous”.

Byrne, who was Labour’s Chief Secretary to the Treasury in Gordon Brown’s administration, said: “Britain cannot afford to be the laundromat of the world’s dirty money. These revelations expose a deep rot that has been allowed to fester and the risk of a corporate registry that has been too weak to protect the public and too easy for fraudsters to exploit.

“When Companies House lists the dead as company directors and lets thousands hide behind a single postcode, it’s not just absurd—it’s dangerous. I welcome the progress to clean this mess up. But we need bolder reform, stronger enforcement, and sharper deterrence.”

Deceased directors are meant to be removed within two weeks of their death, and companies can be struck off if they continue to operate with a deceased director.

In 2022, data firm LexisNexis identified 800 cases where a deceased person had been appointed as a director of a UK company after their death.

The company warned that zombie directors highlighted “the ease with which UK companies can be set up with false data, allowing the legal entity to be used for nefarious purposes with impunity”.

In recent years, the UK financial system has faced a series of allegations that it is too prone to fraud and money laundering. Recent cases involving a Russian warlord using his mother’s gas bill to avoid money laundering checks and hundreds of residents of County Durham being tied to a German fraud scheme.

Despite the thousands of dead directors, financial transparency campaigners are optimistic about business regulation reforms generally, which have just required all UK directors to submit ID verification for any company they own.

Ben Cowdock, Senior Investigation Lead, Transparency International UK told The i Paper: “The Government has identified using deceased directors as a tactic of fraudsters and those with illegitimate aims.”

“Using these new powers to identify potential cases of fraud, correct inaccuracies and improve data quality in the register is a welcome start.

“But more work remains to root out those submitting false information for criminal purposes. Companies House should collaborate with police and money laundering supervisors to identify fraudulent company networks and those behind them. This will make the UK a safer, more reliable place to do business.”

In March, tax campaigner Dan Neidle identified 65,000 companies hiding who truly owned them, despite Government efforts to increase transparency around financial records.

According to the Government report reviewing the 2023 bill, 30 entities managed to register up to 50,000 UK companies which the Government considered to be involved in “illicit activities”, with 10,000 currently being removed from the register.

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Companies House Chief Executive Louise Smyth said it is committed to tackling abuse of the register.

She said: “The reforms that we are delivering through the Economic Crime and Corporate Transparency Act are making a real impact.

“We identified deceased directors as an issue of potential abuse of the register. We took action immediately to query and where necessary correct this information.”

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