Crime Solicitors

The director of a security company has been disqualified for five years, after breaching his duty to act in the best interests of the company by causing or allowing payments totalling £314,588 to be made to third parties.

Anthony Southwood, 36, from Bishop Auckland – director of Logical Security UK Limited – will be unable to act as a director from 23 March 2016 until 2021.

Logical Security UK Limited was incorporated on 14 November 2011 and provided private security. Mr Southwood was a director from 29 April 2013 to 11 March 2014.

Logical Security Limited went into liquidation on 11 March 2014. An investigation by the Insolvency Service found that, from 1 November 2013 onwards, the company had been chased by HMRC in regard to its failure to submit VAT returns and pay VAT due.

Meanwhile, throughout November and December 2013, the company instead made payments to vehicle auction houses and a used car dealership totalling £164,830.

The company also paid a third party £36,624 – and this was followed in early January 2014, with a further transfer of funds totalling £78,687 to the same third party.

On 24 January 2014, Mr Southwood sought insolvency advice – but on the same date caused a payment of £34,447 to be made to a further third party.
In total, £314,588 went from Logical’s bank account – no company books and records were delivered up to the liquidator or to the Insolvency Service to provide an explanation for the transfers and payments.

At the date of liquidation, Logical Security UK Ltd had liabilities of at least £170,680 – but only £10,500 in cash at the bank.

No vehicle assets have been disclosed to or recovered by the liquidator.

Chief Investigator at the Insolvency Service, Sue Macleod, said:

“Company directors should note from this enforcement result that any failure to maintain or deliver up accounting records is likely to lead to serious censure.

“In this particular case, Mr Southwood was requested to explain the nature and purpose of a number of transactions – or deliver up accounting records that were capable of explaining this. Mr Southwood failed to do this.

“This disqualification is a reminder to others tempted to do the same, that the Insolvency Service will rigorously pursue enforcement action – and seek to remove from them the privilege of trading with limited liability, to protect the public for a lengthy period.”

Duncan Lewis Business Crime Solicitors

Duncan Lewis business crime solicitors can advise even before business crime charges are brought, including charges relating to company fraud, financial fraud, breaching conditions of disqualification, tax and VAT evasion, embezzlement, false accounting, phantom companies, failing to deliver up records to the Liquidator, white collar crime and IT crime/hacking.

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