Director disqualified over £300,000 displaced funds
THE director of a Sheffield private security business has been disqualified from directorship for five years after funds of more than £300,000 from the firm made their way to third parties.
The Insolvency Service found that director Anthony Southwood of Bishop Auckland breached his duty to act in the best interests of the company.
Creditors suffered as a result of the payment of £314,588 to third parties, including HMRC.
The Secretary of State accepted a disqualification for Mr Southwood, effective from 23 March 2016, for 5 years.
The private security business, which had its registered address on Scotland Street in Sheffield, went into liquidation on 11 March 2014.
Following an investigation by the Insolvency Service, it was found that the company failed to submit VAT returns and pay VAT due.
The company instead made payments to vehicle auction houses and a used car dealership totalling £164,830. The company also paid a third party a total of £115,311 over the space of seven months.
On 24 January 2014, Mr Southwood sought insolvency advice but on the same date caused a payment of £34,447 to be made to a further third party.
In total, £314,588 went from Logical’s bank account with no explanation for the transfers and payments.
At the date of liquidation, Logical Security UK Ltd had liabilities of at least £170,680, but only £10,500 in cash at the bank. No vehicle assets have been disclosed to or recovered by the liquidator.
Sue Macleod, Chief Investigator at the Insolvency Service, said: “Company directors should note from this enforcement result that any failure to maintain or deliver up accounting records is likely to lead to serious censure.
“In this particular case, Mr Southwood was requested to explain the nature and purpose of a number of transactions or deliver up accounting records that were capable of explaining this, Mr Southwood failed to do this.”
