Waste boss banned for failing to explain £500k of cash withdrawals and bank transfers

A former waste disposal boss has been disqualified for seven years after failing to deliver company records that may have explained £500,000 worth of suspicious bank transfers and cash withdrawals.

Lee Smith, 42, appeared at Liverpool Court on Thursday, September 20, where he also received a 28-week suspended prison sentence, as well as being ordered to perform 250 hours unpaid work and pay prosecution costs of £8,901.

The court heard that Smith was a director of Smith Waste and Recycling (SWR), based in Warrington, before the company entered into a Creditors Voluntary Liquidation in November 2014.

Independent insolvency practitioners were appointed to take charge of liquidating the company.

But Smith failed to share adequate accounting records, despite several requests from both the insolvency practitioners and, later, investigators from the Insolvency Service.

Failure to deliver information requested by the liquidator while winding up a company is evidence of misconduct and in Smith’s case it would have helped explain the whereabouts of funds from SWR’s accounts totalling more than £517,000.

Investigators were unable to explain cash withdrawals from SWR’s bank accounts over the course of a year between September 2013 and September 2014 totalling just over £430,000, and whether they represented genuine business expenditures.

Due to Smith’s lack of co-operation, investigators were also unable to explain more than £86,000 worth of transfers between January and October 2014, made to the accounts of two companies connected to Smith, as well as his remuneration and what were the company’s assets and liabilities at liquidation.

At an earlier court hearing on July 24, 2018 at Wirral Magistrates’ Court, Smith pleaded guilty to one count of misconduct in the course of winding up, and another count for failing to keep accounting records.

Arwel Jones, director of criminal enforcement for the Insolvency Service, said: “Lee Smith’s behaviour throughout the liquidation has been highly unacceptable.

“Failing to deliver any form of company records means that his creditors are at risk of losing a significant amount of money.

“A seven year disqualification order handed down by the courts is a significant ban, which should serve as a deterrent to those directors who fail to conduct their business affairs in accordance with the law.”