Press release

Financial services company director banned for 8 years for failing to deliver up records

The director of companies which provided financial services and ran a trading room in Chelmsford has been disqualified for 8 years.

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James Lau (also known as James On-Loon Lau) was the director of GG Blue Sky Limited and WFM Management Services Limited.

An investigation by the Insolvency Service’s Company Investigation Team found he failed to ensure that adequate books and records relating to both companies were maintained, preserved or delivered up to the liquidator.

The Secretary of State has accepted an undertaking offered by James Lau disqualifying him from managing, or in any way controlling a company, or being a director until 15 December 2024.

The records were inadequate to explain and account for more than £4m income and expenditure from Blue Sky and £1/2m income and expenditure from WFM over a period of less than two years. A large proportion of the funds allegedly related to client pension and other investment management but it has not been possible to explain who these monies belonged to or where they went leaving clients out of pocket.

The records were also inadequate to explain what happened to properties purchased for over £600,000 and payments totalling £41,300 made to an internet gambling site.

Commenting on the case, Rob Clarke, Group Leader, Insolvent Investigations North, said:

This failure to maintain, preserve or deliver up records is totally unacceptable, especially where creditors and shareholders are owed substantial amounts, and potential assets were not preserved or disclosed for realisation by the liquidator. The Insolvency Service has ensured that such behaviour will not be tolerated and that robust action will be taken against directors where misconduct is found.

Notes to editors

James Lau – date of birth November 1970, resides in Woodford Green, London

GG Blue Sky Limited (CRO No. 07101058) was incorporated on 10 December 2009 and operated in Chelmsford as a derivatives trading room. WFM Management Services Limited (CRO No. 03448541) was incorporated on 13 October 1997 and provided financial advice to companies and individuals.

James Lau was appointed as a director of GG Blue Sky Limited (Blue Sky) on 22 February 2010 and was appointed as a director of WFM Management Services Limited (WFM) on 13 October 1997.

Blue Sky and WFM were placed into Liquidation on 17 September 2013, with an estimated deficiency to creditors and shareholders of £7,817,272 in Blue Sky and £26,162 in WFM.

On 23 November 2016 James Lau signed a Director Disqualification Undertaking banning him from being a director of a company for a period of eight years. The undertaking was accepted by the Secretary of State on 24 November 2016, and the period of disqualification will commence on 15 December 2016.

James Lau failed to ensure that Blue Sky maintained, preserved and/or delivered up adequate accounting records from 01 January 2012 to the date of the liquidation on 17 September 2013. As a result it has not possible to:

  • ascertain the complete nature of Blue Sky’s trading activities
  • ascertain the full position in relation to Blue Sky’s tax liabilities, or whether all amounts outstanding have been accounted for to HM Revenue and Customs
  • verify the income and expenditure of Blue Sky and that all income had been accounted for and that all expenditure had been for the benefit of Blue Sky and its creditors

Specifically it has not been possible to:

  • verify what payments totalling £4,502,915 into Blue Sky’s bank account between 01 January 2012 and 17 September 2013 relate to
  • ascertain what payments totalling £4,929,859 from Blue Sky’s bank account between 01 January 2012 and 17 September 2013 relate to and/or whether payments were made for the purpose of Blue Sky’s business

It was not possible to ascertain the true position in relation to GG Blue Sky’s assets as at the date of the Liquidation in that:

  • the only fixed assets realised at the date of the Liquidation were fixtures and fittings
  • the accounts relating to GG Blue Sky for the year ended 31 December 2011 show Freehold Land and Buildings totalling £674,953. Five properties were transferred out of GG Blue Sky just prior to the Liquidation and it has not been possible to verify the reason for these transfers or whether proper or full consideration was received by GG Blue Sky
  • the accounts for the year ended 31 December 2011 do not list any motor vehicles as assets however a motor vehicle was purchased using funds totalling £22,854 from GG Blue Sky’s bank account on 29 and 31 March 2011. It has not been possible to ascertain if this is a company asset or if these sums were applied to a Director’s Loan Account
  • a holiday home was purchased using funds from GG Blue Sky’s bank account on 10 April 2012 and 28 May 2012 totalling £42,062. Pitch fees and an energy bill relating to this holiday home in the amount of £2,267 were also paid. It has not been possible to ascertain if this is a company asset or if these sums were applied to a Director’s Loan Account

It has not been possible to verify that shareholdings have been fully paid up and that the debtors of £6,462,802 referred to in the last accounts prepared (year ended 31 December 2011) have been recovered.

It has not been possible to ascertain the reason for payments totalling £31,500 to an internet gambling site or whether they were for the benefit of GG Blue Sky.

It has not been possible to verify what cash withdrawals between 03 December 2012 and 08 March 2013 totalling £9,404 relate to or whether they were used for the purpose of the business of GG Blue Sky.

It has not been possible to verify whether debit card payments made from GG Blue Sky’s bank account between 01 January 2012 and 30 August 2013 totalling £14,078 were for the benefit of GG Blue Sky.

It has not been possible to verify Mr Lau’s remuneration from GG Blue Sky.

It has not been possible to verify the amount of any outstanding director’s loan. It has not been possible to verify the causes of GG Blue Sky’s failure.

James Lau failed to ensure that WFM Management Services Limited (WFM) maintained, preserved and/or delivered up adequate accounting records from 01 November 2012 to the date of the Liquidation on 17 September 2013. As a result:

  • it is not possible to ascertain the complete nature of WFM’s trading activities
  • it has not been possible to ascertain the full position in relation to WFM’s tax liabilities, or whether all amounts outstanding have been accounted for to HM Revenue and Customs

It has not been possible to verify the income and expenditure of WFM and that all income has been accounted for and that all expenditure has been to the benefit of WFM and its creditors, in that it has not been possible

  • verify what payments totalling £589,434 into WFM’s bank account between 01 November 2012 and 04 September 2013 relate
  • ascertain what payments totalling £593,932 from WFM’s bank account between 01 November 2012 and 04 September 2013 relate to and/or whether payments were made for the purpose of GG Blue Sky’s
  • ascertain the reason for payments totalling £9,800 to an internet gambling site or whether they were for the benefit of WFM
  • verify what cash withdrawals between 01 November 2012 and 29 July 2013 totalling £17,244 relate to, or whether they were used for the purpose of the business of WFM
  • verify whether cheques paid from WFM’s bank account between 06 November 2012 and 03 May 2013 totalling £30,076 were for the benefit of
  • verify whether debit card payments made from WFM’s bank account between 01 November 2012 and 04 September 2013 totalling £55,866 were for the benefit of
  • verify Mr Lau’s remuneration from WFM
  • verify the amount of any outstanding director’s
  • verify the causes of WFM’s failure

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

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Persons subject to a disqualification order are bound by a range of other restrictions.

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Published 30 November 2016