UK directors disqualified for failing to maintain adequate accounting records

Encouraging news.  According to an article published on insolvencynews.com on 9 January 2014, the United Kingdom insolvency authority has banned the directors of two unrelated companies from acting as company directors for failing to maintain adequate accounting records:

“The directors of two unrelated companies have been banned from acting as company directors for failing to maintain adequate accounting records.

The disqualifications, which followed investigations by The (UK) Insolvency Service, were handed to Bradley Carter of Dr Spafish Limited, and Alan Coffey of Datadesk Computer Services Limited.

Carter, whose company offered fish pedicures and also sold franchises, was banned for seven years. Spafish began trading in August 2010 and went into liquidation on 28 November 2011, owing £788,968 to creditors.

The investigation found that due to the lack of available accounting records, it was unable to determine the company’s turnover, who benefitted from cheques and cash worth £181,953 withdrawn from the company’s bank account, and what happened to £68,100 received as part payments for franchise.

Neither was it possible for the investigation to determine the full extent of losses incurred by customers or who these customers were.

Mark Bruce, a chief examiner at The Insolvency Service said: “Company directors must keep sufficient financial records that show and explain the company’s transactions.

“This director failed to do this and there remain a large number of unexplained transactions, representing significant amounts, over the company’s trading period.”

Coffery of Datadesk Computer Services, which operated as supplier of office and technology equipment, was also disqualified for seven years, at Airdrie Sheriff Court in Scotland.

The investigation found that the lack of proper accounting records meant it was not possible to verify if £312,266 paid out of the bank account was for the benefit of the company.

This included over £123,141 paid to a company which holds petroleum exploration and extraction rights in Sierra Leone, West Africa and £26,000 paid for the purchase of coffee and related products. In addition, there were unexplained cheque payments totalling £79,038.

The company entered liquidation on 3 February 2012.

Robert Clarke, head of insolvent investigations north, at The Insolvency Service, said: “The lack of records in this case made it impossible to determine whether there was other, more serious, misconduct at Datadesk and that is reflected in the lengthy period of disqualification.”