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Disgraced businessman and wife sued for £1 million

NEW legal proceedings have been launched against a disgraced Sheffield businessman jailed over the mismanagement of a failed retail chain.

Stephen Hinchliffe and his wife Marjorie, formerly of Dore but who now live in a Peak District mansion, are being jointly sued for more than 1 million in the High Court by the owners of an umbrella firm which also collapsed.

Hinchliffe, who served separate four-year and 18-month prison sentences over his business dealings, was taken on along with his wife as 'consultants' by the Hoyland Fox umbrella company, based in Goldthorpe.

Hinchliffe, who remains banned from being a company director until 2013, was introduced to brothers Shaun and Alex Smith, and their parents Keith and Elaine Smith.

But after the couple became involved, the Smiths - who also own Creative Brollies, on East Bank Road, Sheffield - closed down Hoyland Fox last year, making 80 people redundant in South Yorkshire, and laying off 100 at a factory in Romania.

As well as the job losses, the Smith family say they lost the 1 million they had spent buying the company some years earlier.

The High Court has confirmed to The Star a full hearing into the case will be held in its Chancery Division, which handles company disputes, in November.

The Smith brothers and their parents - whose Creative Brollies firm continues to trade - are seeking in excess of 1 million from 59-year-old Hinchliffe, his wife, and from a holding company Marjorie Hinchliffe owns.

The Star called on the Hinchliffes at their imposing 2 million stone mansion - High Peak Hall, in Hope, Derbyshire - to ask if they wanted to comment about the legal proceedings.

Marjorie Hinchliffe replied: "I don't think so."

Shaun and Alex Smith did not want to comment about the case until it has been heard in court.

In 2001 Hinchliffe, formerly of Long Acres, Newfield Lane, Dore, was jailed for five years - reduced to four on appeal - for paying 800,000 in bribes to a banker in exchange for millions of pounds of unsecured loans for his retail empire.

Hinchliffe had built up Facia group, which owned names such as Sock Shop, Freeman Hardy Willis, Red or Dead and Salisbury's, and had 850 stores.

Before the chain collapsed in 1996 owing 70 million, Hinchliffe enjoyed the high life, owning classic cars and a helicopter, and his corporate headquarters at Beauchief Hall even had a disco in the basement.

He also owned a 15 per cent stake in Sheffield United FC and had a seat on the board until Facia's collapse.

Hinchliffe, who dropped out of Oxford University to train as an accountant, got into business through the grocery trade.

In the 1980s, he bought loss-making Wades department stores and made the chain profitable, then sold the firm and bought Sheffield engineering firm James Wilkes, increasing profits elevenfold in five years.

He started Facia by taking out a 3 million loan to buy leather goods chain Salisbury's in 1994 – then expanded rapidly.

After the chain went bust, South Yorkshire Police brought in the Serious Fraud Office to begin a lengthy investigation which led to Hinchliffe and four other men being jailed.

Following a trial at the Old Bailey in London, Hinchliffe was found guilty of conspiracy to defraud and 10 counts of giving corrupt gifts totalling 813,750 to banker John Doherty, who arranged the loans. Doherty, of the Israeli-based United Mizrahi Bank was imprisoned for five years.

After serving his first sentence, Hinchliffe was sent back to jail for a further 18-month term in 2003, for pleading guilty to the misappropriation of 1.75m from Facia Group.

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