Four people have been disqualified as company directors for lengthy terms relating to their conduct as directors of a haulage company.
Ashley Adam Callow and Adrian Francis Busby, formally appointed directors of Callow Transport Limited (Callow), together with Colin Callow and Elizabeth Gaynor Dawe, both of whom continued to act as directors of Birmingham based Callow despite having formally resigned, have all been disqualified from acting as directors for a combined 32 years.
The disqualification undertakings given to the Secretary of State for Business, Energy and Industrial Strategy (BEIS), from 9 September 2016 in the cases of Mr Ashley Callow, Mr Busby and Mr Colin Callow, and from 14 September 2016 in the case of Ms Dawe, prevent them from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.
Mr Ashley Callow, Mr Busby and Ms Dawe were each disqualified from acting as directors for eight years for failing to maintain, preserve and/or deliver accounting records sufficient to explain the company’s transactions. Together with Mr Colin Callow, also disqualified for eight years, they were further disqualified for having breached their fiduciary duty to Callow by diverting income to an associated company and for having paid advance rent to the detriment of Callow’s creditors and to the benefit of an associated company.
In the absence of proper accounting records, an investigation by the Insolvency Service was unable to explain the purpose of net payments totalling £100,839 made to associated companies from Callow’s bank account in the seven month period prior the end of trade, or the reason for cash withdrawals totalling £187,037 drawn in the five week period before trading ended. Furthermore, the Insolvency Service was unable to establish the circumstances surrounding the disposal of seven vehicles.
The investigation did discover however that having received notice of cancellation on 25 November 2014, Callow enabled an associated company to raise invoices and receive income totalling £326,634 in respect of work Callow had carried out under its main contract in the six week period before trading ended.
Having diverted this income and just four days before trading ceased Callow went on to make an advance rent payment in the amount of £25,032 for trading premises which it shared with an associated company, and from which the associated company would benefit until 25 March 2015, before entering into Creditors’ Voluntary Liquidation on 4 February 2015 with a deficiency of £245,567.
Robert Clarke, Investigations Group Leader at the Insolvency Service said:
Directors, like these, who favour connected companies over the interests of legitimate creditors when their company is in financial difficulty, removing assets and funds leaving creditors high and dry, are not only in breach of a fundamental fiduciary duty but lacking in commercial morality.
These disqualifications, for a combined 32 years, should serve as a reminder to others tempted to do the same that the Insolvency Service will rigorously pursue enforcement action and seek to remove them from the market place for a lengthy period to protect the public.
Notes to editors
Callow Transport Limited (Co. Reg. No. 04708677) was placed into Creditors’ Voluntary Liquidation (CVL) on 04 February 2015 with a deficiency as regards creditors of £245,557. The company, which was incorporated on 24 March 2003, traded as a road freight transport business from The Fort Industrial Park, Dunlop Way, Castle Bromwich, Birmingham, West Midlands.
The Secretary of State accepted undertakings from Ashley Adam Callow, Adrian Francis Busby and Colin Callow that they would not act as directors for a period of 8 years on 19 August 2016. The disqualifications come into effect on 09 September 2016.
The Secretary of State accepted an undertaking from Elizabeth Gaynor Dawe that she would not act as a director for a period of 8 years on 24 August 2016. The disqualification comes into effect on 14 September 2016.
Mr Ashley Adam Callows’ date of birth is 11/03/1990. He is Colin Callow’s son.
Mr Adrian Francis Busby’s date of birth is 06/04/1961.
Mr Colin Callow’s date of birth is 19/02/1953. He is Ashley Callow’s father.
Ms Elizabeth Gaynor Dawe’s date of birth is 07/10/1959. She is also commonly known by her middle name ‘Gaynor’.
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 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: 7 September 2016
From: The Insolvency Service