Directors banned over purchase of gold bullion
Five members of the same family have been disqualified from being company directors for a total of 16 years following a managing director’s purchase of gold bullion for his sole benefit.
Dr Gul-Nawaz Khan Akbar, Mumtaz Khan Akbar, Rab Nawaz Khan Akbar, Fameeda Akbar and Kauser Akbar have been disqualified relating to their directorships of Greentabs (known whilst it traded, as Mumtaz Food Industries Ltd), which traded as a restaurant and food manufacturing plant.
The bans follow disqualification orders made in the High Court in Leeds on 16 November 2017 following an investigation by the Insolvency Service. The disqualifications began on 8 December 2017.
Dr Gul-Nawaz Khan Akbar, the managing director of Bradford-based Mumtaz Food Industries Ltd has been disqualified for six years. He failed to act in the best interest of the company by purchasing gold bullion to the value of £976,055 with company funds for his sole benefit whilst creditors amounting to £447,997 remained unpaid, the investigation found.
Dr Akbar’s two brothers, Mumtaz Khan Akbar and Rab Nawaz Khan Akbar, who were aware of the transaction and allowed it to happen, have each been disqualified for three years.
Dr Akbar’s wife, Fameeda Akbar, and Mumtaz Khan Akbar’s wife, Kauser Akbar, were each disqualified for two years for not upholding corporate governance requirements.
Between 30 November 2012 and 11 December 2012 gold bullion with a value of £976,055 was purchased by Mumtaz Food Industries. Company board meetings minutes show that it was agreed by Dr Akbar, Mumtaz Khan Akbar and Rab Nawaz Khan Akbar that the title to that gold would pass solely to Dr Akbar via the use of an Employee Benefit Trust.
Prior to the purchase of the gold bullion, £447,997 was owed to six unassociated creditors, which Mumtaz Food Industries failed to pay and which remained outstanding at the time of liquidation.
Towards the end of 2012, Mumtaz Food Industries’ trade was scaled down and on 24 May 2013 it entered into voluntary liquidation with an estimated deficiency of £805,630.
Robert Clarke, group leader of insolvent investigations North at the Insolvency Service, said: “Directors who put their own personal financial interests above those of creditors, or who fail to take their directorial responsibilities seriously damage confidence in doing business and are corrosive to the health of the local economy.
“It sends a clear message to other company directors that if you run a company in a way that is detrimental to either its customers or its creditors you may be investigated by the Insolvency Service and as a result removed from the corporate trading environment.”
In response to the disqualification, Dr Gul-Nawaz Khan Akbar said: “A clear injustice has been done and we have instructed our legal team to launch an appeal immediately. This is a complex case that was thrown out the first time.
“On this occasion, the judgement did not find that the transfer to the Employee Benefit Scheme was for my sole benefit. The confusing way in which the Insolvency Service brought the case has received criticism from the court and led to them being penalised in costs.
“Mumtaz employs hundreds of people in Yorkshire and makes a huge contribution to the regional economy. We had some tough decisions to make back in 2013 and sadly the company went into liquidation. But we bounced back and today the company is in robust health with more expansion planned.”
