The director of a wine investment company, which raised £23m from investors and mis-managed the funds 'on a colossal scale', has been banned as a director for nine years for failing to keep proper company books and records, following an investigation by the Insolvency Service (IS).
Paul Vanderhook's company, Bordeaux UK Ltd, took over £23m from investors between October 2008 and November 2011 of which only £4.6m was used to purchase wine. The company went into creditors' liquidation on 30 November 2011 with debts of over £10m but with only £1.7m of wine available.
Of the remaining £19m, Vanderhook benefitted from at least £2m while £13m cannot be accounted for as business-related, due to the lack of accounting records, according to Nedim Ailyan, who was appointed as the liquidator.
The IS investigation showed Vanderhook had failed to keep adequate records for three companies, Bordeaux UK Ltd, Van Der Hook Management Ltd and Van Der Hook Consultancy Ltd.
Ailyan called the situation 'mismanagement on a colossal scale', describing the records as 'completely inadequate'. There were instances where wine was allegedly allocated to individuals but there was no record of the wine being transferred. In addition, individuals alleged that the company disposed of wine on their behalf and this was to either be replaced with other stocks of wine or alternatively the proceeds passed to them but there was no evidence this ever happened.
Ailyan said: 'There were no financial records available to us that would have helped us to formulate a statement of affairs or to reconcile individuals' accounts and on average it was taking at least a day to reconcile each individual's account due to the volume of sales.'
The IS said the lack of any accounting records meant it was unable to establish what taxes were due to HMRC. It was also not possible to determine why Van Der Hook Management Ltd and Van Der Hook Consultancy Ltd received and paid out money from the Bordeaux account as Vanderhook claimed neither company was actively trading.
The IS said Vanderhook had not co-operated with either them or the liquidator and had not explained the financial transactions or why investors lost in excess of £10m.
