Javed-Yacub Fozdar and Riyaz Dawood Fozdar, directors of Pound Empire Ltd, a retail business operating in Stockport, Manchester, Liverpool and Warrington, have been disqualified from acting as company directors for 10 years each, for failing to ensure the company preserved or delivered up adequate accounting records.
The disqualifications, which starts on 15 November 2014 following an investigation by the Insolvency Service, were ordered by District Judge Dignan at the County Court at Stockport.
The failure to keep or deliver up adequate accounting records meant it was not possible to establish the income, primarily in cash, and expenditure of the company , notably the payee and purpose of over £900,000 worth of cheques, nor has s been possible to establish the level of director’s drawings .
The investigation found the directors entered into a transaction on 25 January 2012, the date the company stopped trading, which transferred the assets (mainly stock, some of which was subject to retention of title), to a company owned by the wife of Javed Fozdar as repayment of a debt stated by the directors to have been owed to the connected company. No evidence of this debt was ever produced. As a result of this transfer, these assets were not made available to the creditors nor could the holders of the retention of title recover their goods.
Commenting on the disqualifications, Robert Clarke, Head of Insolvent Investigations North at the Insolvency Service said:
Directors have a duty to ensure that their companies maintain proper accounting records, and following insolvency, deliver them to the office-holder in the interests of fairness and transparency. Without a full account of transactions it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.
The transfer of all the assets of the company to a connected party is a clear breach of the duties directors owe their creditors.
Javed-Yacub Fozdar and Riyaz Dawood Fozdar have paid the price for failing to fulfil their obligations as directors and they cannot now carry on in business other than at their own risk.
Notes to editors
Pound Empire Ltd (CRO No. 04395516)was incorporated on 15 March 2002 and entered into Creditors’ Voluntary Liquidation on 29 February 2012 with assets of £20,200 and liabilities of £611,187.
Javed-Yacub Fozdar is of Manchester and his date of birth is 23 March 1976.
Riyaz Dawood Fozdar is also of Salford and his date of birth is 19 December 1976.
Disqualification orders were made on 24 October 2014 and will come into force on 15 November 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
- act as an insolvency practitioner
- be a receiver of a company’s property
In addition many other restrictions are placed on disqualified directors by other regulations.
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.