These payments were of no benefit to the business and creditors suffered as a result, in particular Her Majesty’s Revenue & Customs (HMRC).
On 2 March 2016, the Secretary of State accepted a disqualification undertaking from Mr Southwood, effective from 23 March 2016, for 5 years.
The company went into liquidation on 11 March 2014. An investigation by the Insolvency Service found that from 1 November 2013 onwards the company had been chased by HMRC in regard to its failure to submit VAT returns and pay VAT due. .Meanwhile throughout November and December 2013, the company instead made payments to vehicle auction houses and a used car dealership totalling £164,830. The company also paid a third party £36,624 and this was followed in early January 2014 with a further transfer of funds totalling £78,687 to the same third party.
On 24 January 2014, Mr Southwood sought insolvency advice but on the same date caused a payment of £34,447 to be made to a further third party.
In total, £314,588 went from Logical’s bank account.
No company books and records were delivered up to the liquidator or to the Insolvency Service to provide an explanation for the transfers and payments.
At the date of liquidation, Logical Security UK Ltd had liabilities of at least £170,680, but only £10,500 in cash at the bank. No vehicle assets have been disclosed to or recovered by the liquidator.
Commenting on the disqualification, Sue Macleod, Chief Investigator at the Insolvency Service, said:
Company directors should note from this enforcement result that any failure to maintain or deliver up accounting records is likely to lead to serious censure.
In this particular case, Mr Southwood was requested to explain the nature and purpose of a number of transactions or deliver up accounting records that were capable of explaining this, Mr Southwood failed to do this.
This disqualification is a reminder to others tempted to do the same, that the Insolvency Service will rigorously pursue enforcement action and seek to remove from them the privilege of trading with limited liability to protect the public for a lengthy period.
Notes to editors
Mr Southwood’s date of birth is 6 December 1971 and he resides in Bishop Auckland.
Logical Security UK Limited (CRO No. 07846549) was incorporated on 14 November 2011 and provided private security.
Mr Southwood was a director from 29 April 2013 to 11 March 2014.
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 that 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.
All public enquiries concerning the affairs of the company should be made to: Insolvent Investigations, Midlands & West, 4th Floor, Cannon House, 18 Priory Queensway, Birmingham B4 6FD. Tel: 0121 698 4000. Email: Adminteam.Midlandsemail@example.com
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.
Media enquiries for this press release – 020 7674 6910 or 020 7596 6187
You can also follow the Insolvency Service on: