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Restaurateur accepts disqualification after failing to preserve and offer up records to Liquidator (15 February 2016)

Date: 15/02/2016
Duncan Lewis, Crime Solicitors, Restaurateur accepts disqualification after failing to preserve and offer up records to Liquidator

A restaurateur has accepted disqualification from acting as a director for eight years, after failing to preserve and/or deliver up records and accounts to the Liquidator after his company went into liquidation.

Ashraf Ali, 55, of Glasgow – also known as Elyas Sultan Ali – was the sole director of the company Greencrescent Limited, a restaurant/takeaway trading as Shimla Pinks in William Street, Johnstone, Renfrewshire in Scotland.

Greencrescent Limited went into compulsory voluntary liquidation on 29 November 2013, with a deficiency to creditors of £255,701 – which subsequently decreased to £136,205.

The failure to ensure that adequate books and records of the company were preserved and/or delivered up to the liquidator meant it was not possible to ascertain the accuracy of late VAT returns submitted by Ali – or the true level of liability owed to HM Revenue & Customs for VAT.

The Insolvency Services was also not able to ascertain what became of company assets valued at £34,679 – and as no company bank statements were produced or could be obtained, it is not known the amount of income or expenditure paid in or out of company bank account, or whether any expenditure was for the benefit of the company.

As a result, Ali gave an undertaking to the Insolvency Service not to act as a director or be involved in the management of a limited company from 9 February 2016.

Commenting on the disqualification, Robert Clarke, Head of Company Investigation at the Insolvency Service said:

“Directors have a duty to ensure that their companies maintain proper accounting records and following insolvency, deliver them to the office-holder in the interests of fairness and transparency.

“Without a full account of transactions, it is impossible to determine whether a director has discharged his duties properly – or is using a lack of documentation as a cloak for impropriety.

“Where records are held electronically, the expectation is that a company will keep a separate, up-to-date back up in a secure location.

“Mr Ali has paid the price for failing to do that, as he cannot now carry on in business for the duration of his ban, other than at his own risk.”

Disqualification undertakings are the administrative equivalent of a disqualification order, but do not involve court proceedings.

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