8-year disqualification for director who failed to keep accounting records
Mr Ashraf Ali, also known as Mr Elyas Sultan Ali, of Glasgow has been disqualified as a director for eight years for failing to ensure that adequate books and records of the company, Greencrescent Limited, were preserved and/or delivered up to the liquidator.
Mr Ali (55) was the sole director of Greencrescent Limited, a restaurant/takeaway, trading as Shimla Pinks, in William Street, Johnstone, from 22 September 2011 until it went into liquidation on 29 November 2013 with an estimated deficiency of £255,701.
Mr Ali gave an undertaking to the Insolvency Service not to act as a director or be involved in the management of a limited company from 9 February 2016.
The failure to ensure that adequate books and records of the company were preserved and/or delivered up to the liquidator means it has not been possible to ascertain the accuracy of late VAT returns submitted by Mr Ali or the true level of liability owed to HM Revenue & Customs for VAT.
It has also not been possible to ascertain what became of company assets valued at £34,679 and as no company bank statements were produced or could be obtained, it is not known what income or expenditure was made into our out of the company bank account and whether any expenditure was for the benefit of the company.
Commenting on the disqualification, Robert Clarke, Head of Company Investigation at the Insolvency Service said:
Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency. Without a full account of transactions it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.
Where records are held electronically, the expectation is that a company will keep a separate, up to date, back-up in a secure location. Mr Ali has paid the price for failing to do that, as he cannot now carry on in business for the duration of his ban other than at his own risk.
Notes to editors
Greencrescent Limited (SC371093) went into compulsory voluntary liquidation on 29 November 2013 with a deficiency to creditors of £255,701, which subsequently decreased to £136,205. The company operated as a ‘restaurant and take away’ from premises at 4 Williams Street, Johnston, Renfrewshire, PA5 8DS.
Ashraf Ali known as Elyas Sultan Ali’s date of birth is 10 February 1960.
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.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Further information on director disqualifications and restrictions is available.
The Insolvency Service (in Scotland) 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 and advises ministers and other government departments on insolvency law and practice. It may also use powers under the Companies Act to conduct confidential fact-finding investigations into the activities of live limited companies.
The Insolvency Service (England & Wales) 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: 9 February 2016
From: The Insolvency Service