Director who allowed his company to be used in financial fraud hit with 8 year ban
Simon Wakefield, the sole appointed director of Wakefield Trading Ltd has been disqualified from acting as a director for eight years for allowing a known criminal to perpetuate a fraud on a financial institution and for failing to maintain or deliver up the company’s accounting records.
The disqualification, from 7 December 2015, prevents Mr Wakefield from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.
An Insolvency Service investigation found Mr Wakefield signed up to a factoring agreement and allowed sales invoices totaling over £400,000 to be assigned to the factoring company, who advanced over £240,000 to Wakefield Trading Ltd.
When the factoring company attempted to collect the monies due, it was unable to collect the vast majority of the cash as most of the “customers” were unable to be located.
Money paid into the company’s bank account by the factoring company was either withdrawn in cash or paid to unknown recipients directly, for which Mr Wakefield was unable to provide a satisfactory explanation.
No records for Wakefield Trading Ltd have been delivered up by Mr Wakefield to the Liquidator, as he is required to do, contending that these are in the possession of a third party.
Commenting on the disqualification, Robert Clarke, Investigations Group Leader at the Insolvency Service said:
Company Directors should note that if they allow their company to be used by a third party for potentially criminal activities the Insolvency Service will vigorously investigate such cases and they will be subject to a long period of disqualification.
Furthermore, directors should be aware of their requirement to maintain proper accounting records and, in the event of insolvency, to deliver these up to the Liquidator.
In this particular case, Mr Wakefield allowed himself to be manipulated by another and must now suffer the consequences of his own inaction.
Notes to editors
Mr Wakefield’s date of birth is 15 July 1970 and he resides in Leicestershire.
Wakefield Trading Ltd (CRO No. 08127688) was incorporated on 3 July 2012 and traded from rented premises at Unit 1a, Global House, Hillside Farm, Rempstone Road, Wymeswold, Leicestershire LE12 6UB.
Mr Wakefield was an appointed director from incorporation. The company ceased trading 2 January 2013 and entered Creditors’ Voluntary Liquidation on 26 November 2013 with liabilities totaling £273,004.80.
On 16 November 2015, the Secretary of State accepted a Disqualification Undertaking from Simon Wakefield, effective from 7 December 2015, for a period of 8 years. The matters of unfitness, which Mr Wakefield did not dispute in the Disqualification Undertaking were that:
- between 3 July 2012 and 2 January 2013 he allowed Wakefield Trading Ltd to breach the terms of a Receivables Finance Agreement to the detriment of the Receivables Finance company
- he failed to ensure that Wakefield Trading Ltd preserved, maintained and/or delivered up adequate accounting records to the Liquidator for the period 3 July 2012 to 2 January 2013
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: 22 December 2015
From: The Insolvency Service