Gary Wright, director of a watch and jewellery wholesaler, has been banned from acting as a director for six years for failing to provide adequate company records, while also treating HMRC detrimentally in comparison to other creditors when the company went into liquidation
Wright was the sole registered director of AS Diamonds Ltd in Stevenage. Although he provided some accounting records to the liquidator, they were inadequate and the Insolvency Service said it was not possible in particular to verify the purpose of payments to himself of over £160,000 as well as cash withdrawals of £40,000 and the validity of a supplier invoice to the value of £33,000.
During the period of trading, Wright caused AS Diamonds Ltd to treat HMRC detrimentally in comparison to other creditors. Although the company charged VAT on its sales invoices, no VAT returns were ever submitted and HMRC therefore issued assessments totalling £123,922.
An analysis of the company’s bank account revealed that in excess of £490,000 was paid out, of which, nothing was paid to HMRC in respect of its accruing VAT debt.
Additionally, during the period 11 December to 22 December 2014, £49,967 was transferred to Wright’s personal bank account which was to the disadvantage of creditors in general.
David Brooks, a chief investigator with the Insolvency Service, said: ‘The period of this disqualification contained within the undertaking signed by Gary Wright sends a clear message to other company directors.
‘Company directors have a statutory duty under the Companies Act to keep adequate company records which should amongst other things satisfactorily explain payments.’
Report by Pat Sweet
