Boss of failed spare parts business handed seven year ban

The boss of a car spare parts company has been disqualified for seven years after he admitted transferring £50,000 out of the company’s bank account

Ayaan Khan was the sole director of Salford Auto Spares Ltd (SAS), which traded in motor vehicle scrap parts.

The company, 35 from Oldham, operated out of leased premises in Swinton, Manchester, and went into liquidation in May 2016 owing more than £112,000 to creditors.

Following the company’s insolvency, the liquidators received claims from at least 98 individual customers, who said that they had made full payments in advance to SAS prior to the liquidation but goods had not been delivered to them at liquidation, leaving them as unsecured creditors.

In particular, 64 customers notified the liquidators that they were owed amounts totalling at least £18,869.

In giving the undertaking, Ayaan Khan did not dispute that between 12 April and 18 April 2016, when SAS was insolvent and was preparing to cease trading on 19 April 2016 before entering into liquidation, he made transfers out of its bank account totalling £50,180.

Due to the lack of information provided, these transfers remain unexplained.

The disqualification prevents Ayaan Khan from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company or limited liability partnership for the rest of his ban.

Robert Clarke, head of insolvent investigations north at The Insolvency Service, said: “In full knowledge that the company was failing, this director has chosen to seek to defeat the claims of creditors, and his improper actions caused losses to others which were wholly avoidable.

“Directors who show such blatant disregard for their fiduciary duties can expect to be investigated by the Insolvency Service and removed from the corporate arena for a lengthy period.”