Three directors of company involved in multi-million pound VAT scam banned for 34 and a half years
The directors of a company involved in deals traced back to fraudulent tax losses of over £13 million have been disqualified from acting as directors for a total of 34 and a half years, following an investigation by the Insolvency Service.
Neil Arthur Pursell (aged 51) of Stoke-on-Trent, Adrian John Sumnall (45) of Market Drayton, Shropshire and James Elphinstone Reed (45) of Tarporley, Cheshire all directors of Ace Telecom Trading Limited (ATT) all gave disqualification undertakings to the Secretary of State for Business, Innovation and Skills (BIS) not to promote, manage, or be a director of a limited company until 2026.
The undertakings given by Mr Pursell and Mr Sumnall followed court proceedings commenced by the Official Receiver.
ATT, which traded as a wholesaler of mobile telephones and other electronic goods, was wound-up by the Court on 8 July 2013 owing more than £18 million to HM Revenue and Customs (HMRC) and with an estimated total deficiency to creditors of £32 million.
In giving the undertakings, Pursell, Sumnall and Reed did not dispute that they caused or allowed ATT to participate in transactions which were connected to the fraudulent evasion of VAT, which they either knew or should have known about, and that ATT wrongfully claimed VAT from HMRC totalling almost £14 million.
Mr Pursell and Mr Sumnall were also directors of Winnington Networks Limited (Winnington) which was placed in to Provisional Liquidation on the application of HMRC in March 2014, after the Court was satisfied that Winnington was involved in fictitious trading connected to a complex VAT fraud. Winnington was subsequently wound up with tax debts of approximately £6 million.
Commenting on the disqualifications, Ken Beasley, Official Receiver at the Insolvency Service’s Public Interest Unit, said:
The directors of Ace Telecom Trading Limited were well aware of the risks of VAT fraud but nonetheless the company entered into transactions linked to the fraudulent evasion of VAT and wrongfully reclaimed VAT input tax of almost £14 million.
VAT fraud represents a pernicious attack on the public finances and the periods of disqualification reflect the serious view taken of the conduct of the directors in this case.
The Insolvency Service will not hesitate to use its enforcement powers to disqualify directors involved in schemes aimed at defrauding HMRC.
Notes to Editors
Ace Telecom Trading Ltd (ATT) (CRO No. 04052361) was incorporated on 14 August 2000 with registered number 04052361. The company’s registered office was The Meridian, 4 Copthall House, Station Square, Coventry CV1 2FT and the main trading address 33 Lawton Street, Congleton, Cheshire CW12 1RU.
The petition to wind up ATT was presented by HMRC on 22 May 2013. The winding up order against ATT was made on 8 July 2013. There were no known assets and an estimated deficiency to creditors of £32,445,895. The issued and paid up share capital was £3.00 giving an overall deficiency as regards creditors and members of £32,445,898.
On 18 June 2015 the Secretary of State accepted a disqualification undertaking from James Elphinstone Reed for a period of 10 years and 6 months. The period of disqualification commenced on 9 July 2015. His date of birth is 9 September 1970.
On 18 August 2015 the Secretary of State accepted a disqualification undertaking from Adrian John Sumnall for a period of 12 years. The period of disqualification commenced on 8 September 2015. His date of birth is 2 April 1970.
On 10 November 2015 the Secretary of State accepted a disqualification undertaking from Neil Arthur Pursell for a period of 12 years. The period of disqualification commences on 1 December 2015. His date of birth is 13 October 1964.
Mr Pursell and Mr Reed were also both directors of Winnington Networks Limited (Winnington). Winnington was placed in to Provisional Liquidation on 19 March 2014, and subsequently wound up by the Court on 28 April 2014. Winnington’s registered office was situated at Richmond House, 570-572 Etruria Road, Basford, Newcastle-under-Lyme, Staffordshire ST5 0SU.
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: 21 December 2015
From: The Insolvency Service