Vinay Kanani has been disqualified from acting as a director for 8 years for recklessly entering into a scheme that made Trade Qualified Limited insolvent and allowing the company to trade to the detriment of creditors, specifically students who had paid for training courses that could never be provided.
An investigation by the Insolvency Service found he used the company’s cash reserves of over half a million pounds to ‘buy’ out previous owners and then took nearly £200,000 from students when it couldn’t provide courses.
The investigation also found:
- Mr Kanani was appointed the sole director of Trade Qualified Limited on 5 October 2012. On the same date, he transferred £538,919 from Trade Qualified’s bank accounts to a limited company of which he was the sole director, for the express purpose of funding the purchase of Trade Qualified shares from its previous owners
- A week later Trade Qualified’s main training provider went into liquidation, and a replacement was never found. Trade Qualified continued to take funds from new and existing students up to the date of its own liquidation. During that period Mr Kanani exercised absolutely no control over Trade Qualified’s affairs
- Trade Qualified continued trading and received a further £198,878 from members of the public for schemes that it had no contract to provide, did not and could not provide
- £140,720 was paid to entities controlled by an associate, who Mr Kanani allowed to control the finances of Trade Qualified without any oversight or control
- £32,000 was used to pay for motor vehicles, when no vehicles had ever been purchased before and Trade Qualified had no business reason to purchase such
- £39,317 expressly intended to be retained under the sale agreement to repay existing Corporation Tax was not used for that purpose
The students who had paid in advance, but were receiving no training, commenced various adverse publicity campaigns, and this, coupled with the depletion in cash reserves resulted in Trade Qualified entering Liquidation on 4 February 2013.
On 5 October 2012, Trade Qualified had £679,304 in its bank accounts. At liquidation, four months later, on 4 February 2013 Trade Qualified had cash reserves of £17,309 and a deficiency totaling at least £521,971.
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
Directors who cause the public to lose money can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place. In this case, Mr Kanani did nothing and knew nothing, resulting in the company funds being removed and members of the public being lured into paying for courses that never could be provided.
There was a complete failure to perform even the most basic of directorial duties. Taking action against Mr Kanani is a warning to directors of their responsibilities and that they cannot allow themselves to be ignorant of actions of others, or otherwise turn a blind eye to the activities of a company of which they are the legal steward.
Notes to editors
Trade Qualified Limited (CRO No. 05958763) was incorporated on 6 October 2006. Its registered office was at 3 North Meadow, Royal Clarence Yard, Weevil Lane, Gosport, Hampshire, PO12 1BP. It traded from premises in Hampshire and the West Midlands. Vinay Kanani was the only director at the time of Liquidation.
Trade Qualified Limited was formed in 2006 and traded as a recruiter for various vocational training providers. The company collected fees up-front from students which it held pending the completion of their training, when the monies would be released to the provider.
Training Qualified Limited was placed into Creditors Voluntary Liquidation on 4 February 2013.
Vinay Kanani is of Wembley, Middlesex. His date of birth is 11 June 1961.
A disqualification order was made on 29 May 2015 at the County Court sitting at Portsmouth County Court. 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 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.
All public enquiries concerning the affairs of the company should be made to: Cheryl Lambert, Head of Outsourced Investigations, Investigations and Enforcement Services, The Insolvency Service, 3rd Floor, Abbey Orchard Street, London SW1P 2HT. Tel: 0207 596 6117. Email: Cheryl.Lambert@insolvency.gsi.gov.uk.
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Published: 14 August 2015
From: The Insolvency Service