Legal News

The shadow director of a company has been disqualified from holding a directorship for eight years, after directing £84,444 to an associated company.

An investigation by the Insolvency Service found that 33-year-old Mohit Joshi from London – the Shadow Director of Puma Source UK Limited – acted as a director of the company while not formally appointed; and raised and issued two invoices totalling £84,444 in the company name, but which included the bank details of an associated company’s agent.

The customer paying the invoices had no idea the money would not be paid to Puma Source UK Limited.

Mr Joshi’s actions meant that creditors were deprived of the sum of £84,444 –and were owed £436,112 when the company went into administration on 3 April 2012.

Puma Source UK Limited was incorporated on 25 March 2011 and traded from The Lodge, Portobello Docks, 551 Harrow Road, London W10 4RH in the business of Information Processing.

Mr Joshi was not formally appointed as a director, but acted as shadow director throughout the trading period.

The Company went into Administration on in April 2012 with an estimated deficiency of £416,207.

On 7 October 2015, the Secretary of State accepted a Disqualification Undertaking from Mohit Joshi, effective from 28 October 2015 for a period of eight years.

The matters of unfitness – which Mr Joshi did not dispute for the purposes of the Disqualification Undertaking – were that, between 27 February 2012 and 3 April 2012, he caused or allowed monies properly due to Puma Source UK Limited, either as work in progress or book debts and totalling £84,444, to be paid to an associated company, to the detriment of creditors.

After the disqualification by the court, Senior Investigator at the Insolvency Service, Martin Gitner, said:

“Company directors should note from this result that the misconduct which can be considered for proceedings under The Company Directors’ Disqualification Act 1986 – and the action taken by the Insolvency Service in respect of that misconduct – is not limited to those people formally appointed as directors at Companies House.”

A disqualification order has the effect that, without specific permission of a court, a person with a disqualification cannot act as a director of a company, take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership – or be a receiver of a company’s property.

In addition, the disqualified person cannot act as an insolvency practitioner, among other restrictions placed on disqualified directors under the law.

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