A YORK businessman whose printing firm was wound up with debts of more than £1 million has been banned from becoming a director of any company for the next seven years for "unfit conduct."

The Insolvency Service ruling means that Stephen Mason, aged 43, of Alness Drive, Acomb Park, York, could face up to two years in prison, a fine or both if he breaches his disqualification undertaking.

Mr Mason, whose Sphere Printing Group Ltd, of Pontefract, was placed in voluntary liquidation on December 3, 1999, had the longest banning order of three directors of the company imposed by the Department of Trade and Industry agency.

John Baker, 48, of Leeds, was disqualified for five years and Roy Bulmer, 45, also of Leeds, was banned for six years.

The men were accused of "breaching their duty" to Sphere by entering into a merger agreement with a print finishing firm called Carton Services Ltd without taking reasonable steps to inform themselves of Carton's financial weakness.

They were found to be "reckless" for not formalising the arrangement in a written agreement as a result of which -

* There were losses significantly greater than Sphere incurred before the merger. About 70 per cent of the losses of the "merged" company was attributable to Carton

* Generated costs of at least £100,000 were not recovered from Carton

* Stock worth about £70,000 was sold by the directors to a former director of Carton and Sphere for £24,000 and

* They took on Carton's liabilities to a finance company to which they paid £125,000 following the sale of Sphere's former property - shortly after the creation of a fixed and floating charge in its favour.

Mr Mason and Mr Bulmer were said to have provided a guarantee and indemnity to Bibby Factors Ltd when they knew "or ought to have known that Sphere was insolvent."

They also should have known that the transaction would be to the detriment of Sphere's creditors in that funds would be transferred from Sphere's account with Bibby to that of Sphere's successor company, Century Print Ltd, in the event of Century failing to meet its obligations under terms of the agreement with Bibby. Century Print, of Pontefract, was eventually dissolved in the year 2000.

Mr Mason said today: "It was a dreadful time. The merger went ahead with the best of intentions, but it just didn't work out, partly for people reasons, faulty machinery reasons and the fact that we moved premises within Pontefract. We were doing too much at once.

"We worked ferociously hard to get it to work and like a lot of people we failed and we all lost money."

Updated: 11:17 Friday, January 11, 2002