Home » News » Director Disqualification News and Comments » Directors under continued attack – Covid fraud, books and records offences, Misleading Investors and Trading to the detriment of the Crown

Directors under continued attack – Covid fraud, books and records offences, Misleading Investors and Trading to the detriment of the Crown

Three recent Insolvency Service investigations that resulted in Director Disqualification.

The breadth of Unfit Conduct relied upon by the Insolvency Service to seek Director Disqualification (DD) bans against Directors of liquidated companies, is very broad indeed.

Sukhbir Mall. partner and specialist solicitor in director disqualification solicitor highlights, in the links below, three recent outcomes of Director Disqualification investigations, all of which resulted in significant DD bans.

Between 1,000 and 1,500 directors are disqualified every year in this country. However, a Disqualification ban is often not the inevitable outcome of a DD investigation. We have a strong track record of successfully defending directors who are being investigated by the Insolvency Service. Click here to see some of our testimonials.

1. 13-year Disqualification for Rotherham based director of Bargain Basement 90 Limited

In this case, the Director fraudulently obtained £150,000 of Covid-19 financial assistance and was disqualified as a director, along with a friend who also took £50,000 of Covid loans fraudulently. Click here for the full story. https://www.gov.uk/government/news/13-year-ban-for-rotherham-bargain-basement-director .

Robert Clarke, Chief Investigator for the Insolvency Service, said:

“Abuse of Covid-19 support schemes, which have provided essential financial assistance to millions by helping businesses trade during the pandemic and protecting jobs, cannot be tolerated.

The Insolvency Service has sent out a clear message that where a company is being used to facilitate fraudulent activity, action will be taken to remove the directors from the corporate arena for a lengthy period of time.”

2. Two Essex directors banned for a total of 22 years

These two directors ran an ‘ethical water investment scheme’ scam which took over £800,000 from investors. The business was ultimately placed in Voluntary Liquidation, whereupon the Liquidator was unable to identify a single genuine investment.

What the Liquidator did find was that over £200,000 had been withdrawn in cash from the company’s bank account between 2018 and 2020, and a further £100,000 payment had been made directly into one of the director’s personal bank account.

Click here for the full story. https://www.gov.uk/government/news/two-essex-directors-banned-for-a-total-of-22-years

Dave Elliott, Chief Investigator of the Insolvency Service, said:

“This so-called ethical investment scheme was a scam, pure and simple. Sadly, it has robbed a number of elderly people of a large chunk of their life savings.

This case should demonstrate to any other directors who may be tempted to mis-use third-party funds that the Insolvency Service will investigate, and we will also support a criminal prosecution if necessary.”

3. Property bosses banned for abusing tax regime

The three directors of an East London property lettings company were disqualified for a total of 13.5 years after abusing the tax authorities and failing to maintain company records. Click here for the full story: https://www.gov.uk/government/news/property-bosses-banned-for-abusing-tax-regime.

Lawrence Zussman, Deputy Director of Insolvent Investigations, said:

“All three property bosses totally disregarded their responsibilities as company directors. The absence of proper company records means we cannot verify legitimate business activities and the failure to submit tax returns means they also abused the taxpayer in the process.

13-and-a-half years is a considerable amount of time to be removed from the corporate arena and will protect creditors and the taxpayer from any further harm caused by Khushal Khagram, Andrew Matin and Alan Clark.”

If you are being investigated by the Insolvency Service and require help, please contact us, or call us on 0121 200 7040 for an initial FREE discussion.

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