Press release

Award wining restaurateur’s accounting records not up to Michelin starred standard

Abdul Malik, a director of both M & M Leisure (UK) Ltd and Seama Group Ltd, which traded as an Indian restaurant under the style of Raval Restaurant, has been disqualified from acting as a director for seven years for failing to maintain, preserve and/or deliver accounting records for the companies.

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An investigation by the Insolvency Service found that there was confusion as to which company was actually trading the restaurant and that over £75,000 could not be accounted for.

On 21 December 2015, the Secretary of State accepted a disqualification undertaking from Abdul Malik, from 11 January 2016, for 7 years, which prevents Mr Malik from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.

The restaurant, named ‘North East Restaurant of the Year’ at the British Curry Awards in 2013, was run by Mr Malik but it was unclear under which company the business actually traded.

The investigation discovered the two companies only had one bank account between them and that over £50,000 of sales income was not banked. Furthermore, over £25,000 of expenditure in cash and cheque payments could not be explained.

Both Seama Group Ltd and M & Leisure (UK) Ltd were placed into creditors’ voluntary liquidation on 12 September 2013 with deficiencies of £65,585 and £128,056 respectively.

Commenting on the disqualification, Robert Clarke, Investigations Group Leader at the Insolvency Service said:

Company Directors should be aware of their statutory obligations to maintain proper accounting records for their companies so that should they cease trading creditors are satisfied that all income generated can be properly accounted for.

Where records are not sufficient to establish this, the Insolvency Service will investigate and pursue those directors who have failed in their responsibilities.

Notes to editors

Mr Malik’s date of birth is 1 April 1970 and he resides in County Durham.

Seama Group Ltd (CRN 07650706) and/or M & M Leisure (UK) Ltd (CRN 07932609) traded as Raval Restaurant as an Indian Restaurant from Church Street, Gateshead Quay, Newcastle upon Tyne, NE8.

Mr Malik was appointed a director of Seama Group Ltd from 27 May 2011 and was an appointed director of M & M Leisure (UK) Ltd from 15 July 2013 and both companies were placed into creditors’ voluntary liquidation on 12 September 2013.

The matters of unfitness, which Mr Malik did not dispute in the Disqualification Undertaking, were that:

Seama Group Limited

“I failed to maintain, preserve and/or deliver up to the Liquidator adequate accounting records for Seama Group Limited (Seama) for the period 01 February 2012 to 12 September 2013, with the consequence that it has not been possible to explain:

  • the sum of £13,182.13 through cheque payments from Seama’s bank account over the period 01 February 2012 to 12 September 2013
  • the sum of £23,485.00 through cash withdrawals from Seama’s bank account and credit card account over the period 01 February 2012 to 12 September 2013
  • the expenditure of at least £52,439.22 in sales income which was not banked between 01 February 2012 and 28 February 2013
  • the turnover of Seama, and expenditure of unbanked sales income between 01 March 2013 and 12 September 2013

Furthermore, the absence and/or inadequacy of the accounting records has had the following additional consequences:

  • the inability to establish whether Seama was liable for the Value Added Tax (VAT) and Pay As You Earn (PAYE) arising from the business of Raval Restaurant between 01 February 2012 and 12 September 2013
  • the inability to establish amounts properly owed to HM Revenue and Customs (HMRC) in respect of Seama’s VAT obligations
  • the inability to establish amounts properly owed to HMRC in respect of Seama’s PAYE and NIC obligations
  • the inability to verify the amount owed to me in relation to the director’s loan account
  • the inability to verify amounts owed to third parties by Seama
M & M Leisure (UK) Limited

“I failed to preserve and/or deliver up to the Liquidator adequate accounting records for M&M Leisure (UK) Limited (M&M) for the period 01 February 2012 to 12 September 2013, with the following consequences:

  • the inability to explain whether M&M was liable for the VAT and PAYE arising from the business of Raval Restaurant between 01 February 2012 and 12 September 2013
  • the inability to establish amounts properly owed to HMRC in respect of Seama’s VAT obligations
  • the inability to establish amounts properly owed to HMRC in respect of Seama’s PAYE and NIC obligations
  • the inability to establish any amounts owed to me in relation to the director’s loan account

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 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 26 January 2016