The English High Court has recently found a director personally liable for fraudulent misrepresentations made by a company of which he was sole director. The misrepresentations were made in the context of a sale of the entire share capital of another company. The director had been the sole negotiator of the sale and signed the share purchase agreement on behalf the selling company.
In order for a misrepresentation to be fraudulent, it must be proved that the person making it did not honestly believe that it was true. Where fraudulent misrepresentation is established, as this case indicates, a director who made the misrepresentation can be held personally liable