Ban for boss who couldn't explain insolvent company's transactions
The director of a company set up to market a fuel-saving device has been disqualified for failing to maintain and preserve proper records.
Mr Upul Eshine Kulasinghe ( 68), director of Pure Strategic Limited, a company set up to market a fuel saving device, has given an undertaking to the Secretary of State for Business Innovation and Skills, that he won’t act as a director of a company for a period of 6 years from 21 June 2016.
Mr Kulasinghe was disqualified after an Insolvency Service investigation found he had failed to maintain and preserve adequate accounting records.
On 30 October 2013 Pure Strategic Limited, with debt of £59,165, was placed into compulsory liquidation following a winding up petition lodged by HM Revenue and Customs. Mr Kulasinghe was the sole director of Pure Strategic Limited at that time.
Following the Liquidator’s appointment the investigation found that for the period from at least 20 October 2011 to 30 October 2013, the company’s books were inadequate to:
- verify expenditure from the company bank account totaling £274,346 or verify whether receipts into the company bank account totaling £296,617 were a true representation of the sales achieved by the company
- verify whether the company owned or disposed of any assets, other than those realised by the Liquidator, and if so, what their value was
- establish the true level of liabilities owed to HM Revenue and Customs or verify the nature and purpose of personal withdrawals totaling £110,500
- verify the number and nature of any employees and the extent of any consequences on PAYE and NIC
Verification has been hampered further as a result of Mr Kulasinghe failing to lodge with the Liquidator’s a Statement of Affairs for Pure Strategic Limited or ensure that the company complied with its statutory obligation to file accounts with the Registrar at Companies House, from the date of incorporation.
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
Keeping proper records is a pivotal duty for directors and there is no place in the business environment for those who neglect their responsibilities in this area and cover up the activities of the companies they manage. The lack of records in this case made it impossible to determine whether there was other, more serious misconduct at Pure Strategic and that is reflected in the period of the disqualification.
This ban should serve as a reminder to any directors tempted to do the same: the Insolvency Service will vigorously investigate you and seek to remove you from the marketplace.
Notes to editors
Pure Strategic Limited - (CRO No. SC263152) - went into compulsory liquidation on 30 October 2013 with a deficiency to creditors of £26,760. The company was incorporated on 9 February 2004, to market a fuel saving device.
Mr Upul Eshine Kulasinghe is of Aberdeen and his date of birth is 7 September 1947.
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: 19 August 2016
From: The Insolvency Service