The Court of Criminal Appeal (CCA) rejected a claim by the Director of Public Prosecution (DPP) that a one-year suspended sentence imposed on a company director who pleaded guilty to conducting business with intent to defraud was too lenient. The offence resulted in a loss of over £1 million (€1.27 million) to Ulster Bank Commercial Services.

Mr Niall Clarkin (62), Springfield Park, Foxrock, Co Dublin, pleaded guilty in Dublin Circuit Criminal Court and was sentenced on June 14th, 2002, to one year's imprisonment, which was suspended. Mr Clarkin was managing director of the Label Centre, Clondalkin, Co Dublin.

Mr Gerard Roche (68), New Row Square, Dublin, the firm's general secretary and financial controller, also pleaded guilty and received a suspended one-month sentence.

Both pleaded guilty to carrying on a business with intent to defraud Ulster Bank Commercial Services between January 1st, 1996 and October 14th, 1998. Both lodged false invoices in the hope that the company would get out of financial difficulty and that they could repay the money.

Giving the decision of the CCA on the DPP's appeal against the leniency of sentence yesterday, Mr Justice McCracken, presiding, said Clarkin pleaded guilty to fraudulent trading contrary to section 297 of the 1963 Companies Act as inserted by section 137 of the 1990 Companies Act.

The court was not aware of any other case in which there had been a prosecution on indictment under the section. Therefore, the CCA and the trial judge did not have a precedent to assist in deciding the proper sentence, he said.

The charge related "only to the actions of the respondent in the course of carrying on the business of the company and, therefore, relates to corporate fraud as opposed to individual fraud". The judge said the distinction was exemplified in this case as there was no suggestion that Clarkin personally benefited from the fraud. He was knowingly a party to a fraud by the company on the bank.

The Label Centre began to suffer serious financial problems in 1996 and, to get the necessary finance to keep trading, it submitted bogus invoices and received payment on foot of them.

Matters taken into account by the trial judge included the fact that Clarkin ultimately approached and supplied Ulster Bank with full details of what had been going on, he sold his home, he entered into an arrangement with his creditors, consented to be disqualified from acting as a director for five years, got no personal benefit and made restitution to the best of his ability.

The motive was to try to save the company, which employed 50 people, and Clarkin was unlikely to re-offend, the CCA held.