An Aberdeenshire director has been disqualified for failing to ensure her restaurant company kept adequate books and records.
Mrs Ambia Begum, (28), director of Lochnagar Indian Brasserie, a licensed Indian restaurant in Ballater, has been disqualified from being a director for 8 years, following an investigation by the Insolvency Service.
At a hearing in Aberdeen Sheriff Court on 25 February 2016, the Sheriff made an eight year order against Ambia Begum, which commences on 16 March 2016. The Disqualification prevents Ambia Begum from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the order.
On 1 July 2014 Lochnagar Indian Brasserie, with debts of £424,962, was placed into compulsory liquidation following a winding up petition lodged by HM Revenue and Customs. Ambia Begum was the sole director of Lochnagar Indian Brasserie at that time.
Following the Liquidator’s appointment, the investigation found that from 1 December 2011 to 1 July 2014, the company’s books were inadequate, thereby not making it possible to:
- Verify expenditure from the company bank account totalling £276,783.
- Verify whether receipts into the company bank account, of £276,783, were a true representation of the sales achieved by the company, especially as, due to the nature of the business, a significant proportion of the sales were likely to have been cash.
- Verify whether the company owned, or had disposed of, any assets and if so, what their value was.
- Establish the true level of liabilities owed to H M Revenue and Customs Establish whether the company should have been registered for PAYE and NIC
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
Directors who operate cash based businesses have to maintain sufficient records to explain where these monies have gone and following insolvency make sure that such records are delivered up for scrutiny by the relevant bodies.
By failing to do this the public can not be sure that all funds received by the company were used for legitimate purposes. The substantial period of this disqualification reflects the fact that when a company fails to keep adequate financial records it is simply not possible to determine whether there has been other, more serious, impropriety in relation to the management of its affairs.
Notes to editors
Ambia Begum’s date of birth is 2 January 1988.
Ambia Begum was appointed as director of Lochnagar Indian Brasserie Ltd on 2 December 2011 and remained a director throughout the company’s trading.
Lochnagar Indian Brasserie Ltd (SC412390) went into compulsory liquidation on 1 July 2014 with a deficiency to creditors of £270,811, which subsequently increased to £424,962. The company operated as a licensed restaurant from the premises at 2 Church Square, Ballater, AB35 5NE.
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
- act as a director of a company
- take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
- be a receiver of a company’s property
In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations.
Further information on director disqualifications and restrictions can be found here.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
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Published: 19 August 2016
From: The Insolvency Service