Crackdown on companies employing illegal workers sees 5 more directors banned
Five directors of restaurants in Yeovil, Cardiff and Newport are the latest to be banned from running companies for knowingly employing illegal workers, following investigations into three restaurant businesses by the Insolvency Service.
Abdul Boshor (43) and Samiur Rahman (24), who ran the Empire Restaurant (Cardiff) Ltd, signed undertakings banning them from acting as directors for seven and six years respectively. Abdul Kayum (46) and Rothna Begum (40), who ran the Akash Indian Restaurant in Yeovil, signed undertakings for six years. Mohammed Joynal Hye, who ran the Delhi Restaurant in Newport, has signed an undertaking not to be a director of a limited company for seven years.
In the past year, a campaign led by the Insolvency Service, working with Home Office Immigration Enforcement, has seen 27 directors and two bankrupts across the country banned from running companies for a total of 194 years for employing illegal workers. Further cases are due to come before the courts in the coming months.
Commenting on these bans, Vicky Bagnall, Director of Investigation and Enforcement, at the Insolvency Service, said:
These cases show that by working together government agencies are cracking down on rogue companies and banning their directors for considerable periods of time.
Illegal working is not victimless – legitimate jobseekers have fewer opportunities to find work, honest competitors are undercut and tax to fund essential public services is not collected.
Disqualification proceedings were launched against the five directors in the latest cases after an investigation by the Insolvency Service found that:
- during a visit by Home Office Immigration Enforcement The Akash Indian Restaurant in Yeovil was found to employ at least one illegal worker. An investigation by HMRC also found that the company had failed to correctly operate a PAYE system for its employees between 2006 and 2013. The company later entered liquidation leaving a PAYE and NIC tax liability of £101,264, and total debts of £138,243
- Mr Bosher and Mr Raham knowingly employed illegal workers as waiters in breach of UK immigration rules at their Cardiff restaurant. In addition to employing illegal immigrants both directors failed to ensure that the company filed accurate VAT records between June 2012 and June 2013 leaving an estimated tax liability of £27,440
- Mr Hye caused or allowed a company to employ illegal workers, failed to maintain, preserve or deliver accounting records to explain transactions, failed to make VAT returns after January 2012 and VAT payments after June 2012
Notes to editors:
All three investigations were carried out by the Insolvency Service working in partnership with Home Office Immigration Enforcement.
Empire Restaurant (Cardiff) Ltd (CRO No.06881227) was incorporated on 20 April 2009. The registered office was 157-159 Albany Road, Cardiff CF24 3NT.
Abdul Boshor, date of birth 17 November 1971 and Samiur Rahman, date of birth 13January 1991, both of Cardiff, were appointed on 30 May 2012 and 28 May 2012 respectively.
Empire Restaurant (Cardiff) Ltd was subject to a creditors’ voluntary liquidation on 8November 2013 and had an estimated deficiency of £73,465.
Akash (Yeovil) Limited (CRO No. 05789230) was incorporated on 21 April 2006. The registered office was 101 Middle Street, Yeovil, Somerset, BA20 1NA.
Abdul Kayum, date of birth is 5 April 1969, of Yeovil, was a director of Akash (Yeovil) Limited from 21 April 2006 until liquidation. Rothna Begum, date of birth is 2 May 1975, also of Yeovil, was appointed a director of the company on 21 April 2006 and resigned on 1 January 2013.
Following a visit by Home Office Immigration Enforcement on 2 August 2012 the company was served with a Notification of Liability for a Civil Penalty of £5,000. The company paid £750 of this penalty, leaving £4,250 unpaid when the company ceased to trade on 20 January 2013.
On 8 March 2013, HMRC issued a warning letter to Akash that they would seek to recover unpaid NIC and PAYE contributions. That same day, the company held a board meeting and concluded it was insolvent. The company duly entered into liquidation on 10 April 2013.
East India Newport Limited (CRO No. 06985685) was incorporated in August 2009 and traded as Delhi Restaurant, an Indian restaurant and takeaway, from Caerleon Road, Newport, Gwent. The sole director was Mr Mohammed Joynal Hye of Newport, Gwent.
The company was subject to a Winding up Order on 11 November 2013 and owed creditors some £145,000., including £17,500 for fines associated with the employment of illegal workers. Mr Hye also failed to maintain, preserve or deliver up accounting records for the period 1 September 2011 to 24 April 2013 to show the extent of cash received by the company, estimated to be £67,660 and its disposal, to identify the recipients of £58,719 withdrawn in cash and the beneficiaries of cheque payments totalling £20,044. VAT returns were not submitted to HM Revenue & Customs after January 2012 and no payments were made in respect of VAT after June 2012.
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 deals with disqualification of directors in all corporate failures. It also 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, , 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.
Published: 22 June 2015
From: The Insolvency Service