David Hymers has stood down from his role as Conservative member for Alston Moor on the council and given up his role as the authority’s economic development portfolio holder, claiming it was the “honourable thing to do”.
It followed the publication of a piece in satirical magazine Private Eye about the liquidation of Totalpost Services.
The business, of which Mr Hymers was managing director, was set up in 2002 in Alston and awarded the Queen’s Award for Enterprise in International Trade in 2013.
It was broken up earlier this year into three companies.
Two are ongoing businesses – Totalpost Ltd, which has taken on the ink cartridge side of the business and employs 25 people in Alston, and Totalpost Mailing and Mechanisation, which deals with mailroom equipment.
The third comprised its distribution division for American-built airport x-ray equipment. It was put into voluntary liquidation in March.
Mr Hymers’ resignation came after the magazine ran an article about the liquidation saying this was done with the company owing some £2.5m, including almost £400,000 to HM Revenue and Customs (HMRC).
Mr Hymers said: “Nothing has been illegal, nothing has been hidden and nothing has been like a phoenix company.”
He said he planned to sell the x-ray operation to an American company last year, which was delayed and led to the liquidation. Mr Hymers confirmed, though, that the American firm was still due to take it over.
He said he was one of the creditors and much of the debt comprised inter-company loans, along with the American manufacturers, and that any money owed to HMRC was “recoverable”.
He resigned from his council positions on Wednesday and said he had discussed the matter with both officers and members of the authority.
“I definitely regret it, I think the achievements we have made over the last year have met with universal praise for the office,” he said. “I thought the honourable thing to do was to resign.”
Mr Hymers added: “I feel my integrity and honesty have been brought into question, not specifically by the Private Eye article but that was the catalyst.”
He said most people on the council had not had experience of running a company which had the size and complexity of Totalpost. In addition, Mr Hymers said he had received several supportive messages from officers and members, and that in the company’s lifetime it had paid £5m in tax to HMRC.
Mr Hymers, who is a former winner of Businessperson of the year in the CN Group Business Awards, said he was unlikely to take legal action against Private Eye on cost grounds.
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