Insolvency Service and Home Office Investigation leads to 7 year disqualification for director of a Bristol based Hotel company.
Gulam Saber Malek of Birmingham, a director of Bayeswater Ltd trading as The Stretton Hotel from 27 December 2010 to 5 April 2013, was found on 9 October 2012 to be employing five workers who were not eligible to work in the UK. All had been employed while Mr Malek was a director.
The business, a Hotel, went into liquidation on 5 April 2013, owing £139,622 to creditors including £25,000 in respect of a fine imposed by Home Office Immigration and Enforcement for employing illegal workers.
On 20 April 2016, District Judge Ingram sitting at the Birmingham District Registry, made a Disqualification Order against Mr Malek for a period of 7 years. The Order bans Mr Malek from acting as a company director or from managing or in any way controlling a limited company until 2023. The disqualification period commences on 11 May 2016.
Sue MacLeod, Chief Investigator of Insolvent Investigations, Midlands & West at the Insolvency Service, said:
Illegal workers are not protected under employment law, and as well as cheating legitimate job seekers out of employment opportunities these employers defraud the taxpayer and undercuts honest competitors. This should serve as a warning to other directors who may feel tempted to break the law.
Immigration law, amongst other things, places a responsibility on employers in preventing illegal workers in the UK. To comply with the law, a company must check and be able to prove documents have been checked prior to recruitment that show a person is entitled to work.
Notes to editors
Bayeswater Ltd (CRO No07388229) was incorporated on 27 September 2010 and traded from 206-214 North Promenade, Blackpool FY1 1RU as The Stretton Hotal. Mr Gulam Saber Malek was the sole registered director from 27 September 2010 to 5 April 2013 (the date of liquidation).
The seven year Disqualification Order was obtained at Birmingham District Registry on 20 April 2016. Neither Mr Malek nor any Counsel appointed on his behalf attended the hearing in the proceedings.
The matters of unfitness that were laid before the court, and which resulted in the Order were that:
Mr Malek failed to ensure that Bayeswater complied with its obligations as an employer under the Immigration, Asylum, and Nationality Act 2006 (“the IAN Act”). In particular, Bayeswater employed five illegal workers and as a result, Bayeswater was served a penalty of £25,000 by Home Office Immigration Enforcement (“HOIE”), (formerly the UK Border Agency). Bayeswater was unable to pay this penalty and went into liquidation, with a deficiency as regards creditors in the sum of £139,621.
Mr Malek’s date of birth is 24 December 1967 and is known to have resided in Birmingham.
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 can be found here.
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: 18 May 2016
From: The Insolvency Service