Disqualifications for Two Directors who Made Money Disappear

One of the most important differences between a limited company and a sole trader is the distinction between the individual and the business in terms of finances and accountability. For a sole trader, there is no distinction between private and company money. The business owner can dip into company accounts whenever they wish to buy themselves a new car, pay for school fees, or build an extension to their house. A limited company is a whole different story, and that’s something the following directors completely ignored.

Seven year disqualification for sweeping money under the carpet

Victor Ronald Bilkey (51), the director of Relay Carpets UK Limited, based in Benfleet, Essex, has been disqualified from acting as a company director for seven years for failing to maintain proper company records. The disqualification is the result of an investigation by the Insolvency Service, following the company’s insolvency in November 2013 with outstanding liabilities to HMRC.

The investigation found that without the proper accounting records, it was impossible to get to the bottom of the company’s finances. This included the reasons for a number of payments made from the company’s bank account, such as £538,078 of cash withdrawals, £25,000 of international payments, and payments of £170,628 that appeared to be for the personal benefit of associated parties. The Insolvency Service was also unable to determine the true level of company assets and liabilities.

A clear message to other company directors

Commenting on the disqualification, a chief investigator with the Insolvency Service, said: “The period of disqualification contained in the undertaking signed by Mr Bilkey, sends a clear message to him and to other company directors: If your company becomes insolvent and you have failed to maintain proper records that sufficiently explain all the transactions of the business, you run the risk of being removed from the business environment.”

Five year disqualification for mishandling company funds

A construction services boss has been disqualified from acting as a company director for five years for causing Hulbert Homes Limited to make payments to the detriment of company creditors.

The disqualification, which follows an investigation by the Insolvency Service’s investigations team in London, prevents Mr Hulbert from acting as a director of a limited company until 9 July 2020.

Allowing creditors to go unpaid

Hulbert Homes entered into a company administration in April 2012, owing more than £1mlilion to its unsecured creditors, with no unsecured assets available. The subsequent investigation into the company’s dealings found that between 23 June 2011 and April 2012, Mr Hulbert made several payments totalling £42,664 for his own benefit, including £17,734 to an auction house, £20,000 for private school fees, and £4,930 to a former girlfriend.

Prior to the time these payments were made, two creditors had already obtained county court judgements (CCJs) against Hulbert Homes, and the company had been advised it was insolvent. Despite the insolvency, Mr Hulbert still made the aforementioned payments and allowed creditor judgements to go unpaid.

Failure to act in the best interests of creditors

Welcoming the court’s decision to disqualify Mr Hulbert, Mark Bruce, a chief investigator at the Insolvency Service, said: “Hulbert failed to act in the best interests of the company and its creditors. The Insolvency Service will always look to remove directors from the business community who act below the standard that should be expected of them given the circumstances of their company’s trading.”

Written by: Mike Smith

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