Haulage company directors banned for 32 years

FOUR former directors of a failed Birmingham haulage company have been disqualified from holding such positions for a combined period of 32 years.

Ashley Adam Callow and Adrian Francis Busby, formally of Callow Transport Ltd, based on the Fort Industrial Park, Castle Bromwich, together with Colin Callow and Elizabeth Gaynor Dawe have all been disqualified following action by The Insolvency Service.

The quartet were said to have left creditors “high and dry”.

Ashley Callow, Busby and Dawe were each disqualified from acting as directors for eight years for failing to maintain, preserve and/or deliver accounting records sufficient to explain the company’s transactions.

Together with Colin Callow, also disqualified for eight years, they were further disqualified for having breached their fiduciary duty to Callow (the firm) by diverting income to an associated company and for having paid advance rent to the detriment of Callow’s creditors and to the benefit of an associated company.

In the absence of proper accounting records, an investigation by the Insolvency Service was unable to explain the purpose of net payments totalling £100,839 made to associated companies from Callow’s bank account in the seven-month period prior to the end of trade, or the reason for cash withdrawals totalling £187,037 drawn in the five-week period before trading ended.

Furthermore, the Insolvency Service was unable to establish the circumstances surrounding the disposal of seven vehicles.

The investigation did discover however that having received notice of cancellation on November 25, 2014, Callow enabled an associated company to raise invoices and receive income totalling £326,634 in respect of work Callow had carried out under its main contract in the six-week period before trading ended.

Having diverted this income and just four days before trading ceased, Callow went on to make an advance rent payment of £25,032 for trading premises which it shared with an associated company – from which the associated company would benefit until March 25, 2015 – before entering into Creditors’ Voluntary Liquidation on February 4, 2015 with debts of £245,567.

Robert Clarke, Investigations Group Leader at the Insolvency Service, said: “Directors, like these, who favour connected companies over the interests of legitimate creditors when their company is in financial difficulty, removing assets and funds leaving creditors high and dry, are not only in breach of a fundamental fiduciary duty but lacking in commercial morality.

“These disqualifications, for a combined 32 years, should serve as a reminder to others tempted to do the same that the Insolvency Service will rigorously pursue enforcement action and seek to remove them from the market place for a lengthy period to protect the public.”