London: A 58-year-old Indian-origin director of a pizza company in the UK has been banned for seven years for making payments totalling at least 205,000 pounds to a company in which he had a personal interest.
Balwinder Singh’s Charnwood Foods Ltd in the WestMidlands region of England had the franchise for Papa John’s Pizza in Bromsgrove from March 2014 to March 2015.
The company went into liquidation on August 26, 2015, with no assets, owing an estimated 358,816 pounds to creditors of which 308,233 pounds was owed to a bank in respect of bank loans.
An investigation by the UK’s Insolvency Service found that Singh “unreasonably caused payments” of at least 205,000 pounds to a partnership he had a personal interest in.
Under the “disqualification undertaking” presented by the Insolvency Service to the Secretary of State for Business, Energy and Industrial Strategy (BEIS), Singh cannot manage or control any company until July 30, 2024.
“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,” Aldona O’Hara, Investigation Leader – Insolvent Investigations Midlands and West at the Insolvency Service, said in a statement this week
“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,” O’Hara said.
“This disqualification will prevent a repeat occurrence of this and act as a deterrent to any other directors who are thinking of putting their own interests before that of their company’s creditors,” the statement noted.
The misconduct accepted by Singh was that he breached his fiduciary duties as director of Charnwood Foods Ltd in that he unreasonably caused payments totalling at least 205,000 pounds to be made to a partnership in which he had a personal interest and that these payments were at the risk of, and to the detriment of, Charnwood Foods Ltd and its creditors.
He also failed to deliver up adequate accounting records to show that such payments were reasonable. Singh was the sole appointed director and the sole shareholder of the company.
A disqualification order in the UK 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.
The UK’s Insolvency Service is an executive agency sponsored by the government’s Department for Business, Energy and Industrial Strategy (BEIS) to administer the insolvency regime in the country.