Birmingham wholesaler shut down after being found as potential ‘vehicle of fraud’

A Birmingham wholesaler has been shut down following an investigation that raised concerns about financial misconduct and a lack of transparency.

SAK Wholesale, based at Alexandra Trading Estate in Handsworth, was officially wound up at the High Court in Manchester on 29 April after Insolvency Service investigators described it as potentially being “a vehicle for fraud”.

The company is accused of overstating its profits to secure goods and services on credit, debts which were never repaid.

Investigators found no accounts had been filed for the most recent financial year, and cast doubt on the accuracy of previous filings.

Despite being active online, the company’s physical premises had been abandoned and stripped.

The directors also failed to cooperate with the Insolvency Service and did not explain more than £2.5m of payments made from the company’s bank account over just two months in 2022.

David Hope, chief investigator at the Insolvency Service said: “There are serious concerns about SAK Wholesale being used as a vehicle for fraud. The company has seemingly been abandoned, but still owes over £270,000 to its creditors. Despite this, payments of over £2.5m were made from the company over a period of two months in 2022, but without proper records, we were unable to confirm where this money came from.

“Accounts were not submitted for the last financial year, and the veracity of accounts submitted in previous years is in doubt. Despite the directors of SAK Wholesale refusing to cooperate with our investigation, the records we uncovered showed the company operated with a real lack of transparency and had a history of improper behaviour.

“This winding-up order will help protect the public and business community by ensuring SAK Wholesale can’t be used for future trading.”

Investigators also found that wording on the SAK website had been copied from a local competitor, and one of its company accounts had received an unauthorised £200,000 payment from a third party, which was later refunded by the bank when the error was discovered.

Due to the absence of banking records, investigators could not confirm any legitimate trade or track how funds were spent, with the company still owing more than £270,000 to creditors.

The Official Receiver has been appointed as liquidator.