Company director could not hide from 8 year ban for asset diversion
Mohit Joshi, the Shadow Director of Puma Source UK Limited, has been banned from being a company director for 8 years for diverting £84,444 to an associated company.
The disqualification, from 28 October 2015, prevents Mr Joshi from directly or indirectly becoming involved in the promotion, formation or management of a company until 28 October 2023.
An Insolvency Service investigation, which led to the disqualification, uncovered that Mr Joshi:
- acted as a director of the company whilst not formally appointed, and
- raised and issued two invoices totalling £84,444 in the company name, but which included the bank details of an associated company’s agent.
The customer paying the invoices had no idea the money wasn’t going to Puma Source UK Limited. These actions meant creditors were deprived of £84,444, and were owed £436,112 when the company went into administration on 3 April 2012.
Commenting on the disqualification, Martin Gitner, Senior Investigator at the Insolvency Service, said:
Company directors should note from this result that the misconduct which can be considered for proceedings under The Company Directors’ Disqualification Act 1986, and the action taken by the Insolvency Service in respect of that misconduct, is not limited to those people formally appointed as directors at Companies House.
Notes to editors
Mr Joshi’s date of birth is 22 November 1982 and he resides in London.
Puma Source UK Limited (CRO No. 07578278) was incorporated on 25 March 2011 and latterly traded from The Lodge, Portobello Docks, 551 Harrow Road, London W10 4RH in the business of Information Processing. Mr Joshi was not formally appointed as a director, but acted as shadow director throughout the trading period. The Company went into Administration on 3 April 2012 with an estimated deficiency of £416,207.
On 7 October 2015, the Secretary of State accepted a Disqualification Undertaking from Mohit Joshi, effective from 28 October 2015, for a period of 8 years.
The matters of unfitness, which Mr Joshi did not dispute for the purposes of the Disqualification Undertaking, were that between 27 February 2012 and 3 April 2012, he caused or allowed monies properly due to Puma Source UK Limited, either as work in progress or book debts, in the total sum of £84,444 to be paid to an associated company to the detriment of creditors.
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](https://www.gov.uk/government/collections/information-about-company-director-disqualification.
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: 17 November 2015
From: The Insolvency Service