Resolved – Major Security/Charges problem at UK Companies House

We alerted you to a problem in our previous article of 26 February 2024, where security granted by UK companies and registered at Companies House had been wrongly stated to have been released, apparently by an individual “bad actor”. We are pleased to report this seems to have been resolved now by the Registrar of UK Companies exercising new powers which, fortuitously and coincidentally, came into effect on Monday 4 March. These new powers are part of a wholesale updating of processes at Companies House under the Economic Crime and Corporate Transparency Act 2023. As a result, this has avoided the need for court orders to correct the register which would have been required had this attack on the Register occurred any earlier before those new powers kicked in.

What the Registrar seems to have done is track any filings of charge release forms – MR04s – through the webfiling account of that individual bad actor. The Registrar has then unilaterally overnight between 5 and 6 March rectified the charges register of each of the 190 identified UK companies to remove the wrongly filed MR04s for the 800 charges granted by those companies which were then incorrectly marked as being “satisfied”. The individual’s webfiling account which enabled him to lodge the relevant forms was terminated by Companies House as soon as this came to their notice – we are not aware of any filings being made by him after 22 February 2024. The earliest MR04 which has been found to have been registered by him was on 1 February 2024, but the charges marked as satisfied dated from much earlier to those very recently filed.

Some of our clients had made us aware of wrongfully discharged charges granted by or to them and we checked those late evening on 5 March 2024. We can confirm that the charges registers for the relevant companies have all been restored to the position they were in before the MR04s were wrongly filed – all charges previously marked as “satisfied” are now marked as still being “outstanding” with their original dates of registration remaining intact. Other law firms have now also confirmed that they are seeing the same in relation to the charges they had been made aware of.

Next steps

While we are reasonably sure Companies House will have picked up all the charges released by the individual bad actor, they haven’t confirmed that and so there is a risk there may be a few which haven’t been corrected. As a result, we will continue to double-check when we do searches on UK companies that there are no “red flags” in relation to any release forms registered at Companies House and will let our clients know if we find anything untoward. In addition, when this first came to light we did extra checks on deals under way and earlier just completed transactions.

If you have any concerns about any charges, please do get in touch with your normal DLA Piper contact who will be able to help and advise what steps to take to get Companies House to rectify the situation.

Thanks for this concerning situation having been resolved so quickly are due to the Companies Register team having appreciated how serious this was and expediting a solution and to UK Finance for raising lenders’ and borrowers’ concerns with the Registrar.