Decision

Decision for Atif Mirza

Published 1 April 2021

0.1 WESTERN TRAFFIC AREA

0.2 ATIF MIRZA - TRANSPORT MANAGER

0.3 PUBLIC INQUIRY HEARD IN BRISTOL AND VIA TEAMS, 2 MARCH 2021

1. BACKGROUND

Atif Mirza applied to be transport manager for Universal Delivery Solutions Ltd (OK2021171) and MBL Express Ltd (OH2020520). It was unclear whether the contract for professional competence was with Mr Mirza as a natural person or ABM Consultancy. Those applications were determined by me at a preliminary hearing in September 2020. In preparing for that hearing, specifically in seeking to identify whether ABM Consultancy was an incorporated body, I became aware that Mr Mirza was disqualified from acting as a company director at Companies House.

Mr Mirza had previously been a director of ABM Technology Ltd (company number 06366808) which entered liquidation in July 2013. I noted the following from the liquidators annual report for the year ending 9 July 2014:

1.1 Investigations

In accordance with my statutory obligations, I have reviewed the affairs of the Company to identify any possible realisations for the estate. I have also reviewed the conduct of the Director prior to liquidation and a report has been submitted to the Insolvency Service, a division within the Department of Business, Innovation & Skills (formerly BERR/DTI), concerning the conduct of those persons who were directors or shadow directors at any time in the three year period prior to the Company being placed into Liquidation. In accordance with the directive of the Secretary of State we are unable to disclose any further information for confidentiality reasons.

Further investigations in relation to the company’s trading activity established the company was involved in Missing Trader Intra Community Fraud (MTIC) also known as Carousel (VAT) Fraud, and a detailed review of the Company’s books and records has been ongoing in respect of:

• All the company’s purchases and sales

• The pricing and margin analysis on the products

• Analysis of all known company’s bank accounts

• Analysis of the company’s financial position, including changes in turnover

• Reports on any due diligence conducted by the company with traders

I am continuing with my investigation into the company’s affairs to establish whether potential causes of action exist against various parties and enquiries continue into potential links to other failed companies trading within the same business sector

Later reports show that funding was unavailable to continue the investigation and that Mr Mirza accepted a nine-year disqualification from 18 June 2015 to 17 June 2024.

It was unfair to put these serious matters to Mr Mirza at the September hearing so I put him on notice that they would need to be considered in due course. This hearing is based on a fresh call-in letter which set out the relevant circumstances and concerns.

2. EVIDENCE

[redacted]

Mr Mirza told me that he had previously been a director of a printer ink company for 12 years. He had been made redundant and set up his own company in 2007. He was importing ink cartridges from China and selling online. He was offered other products such as computer peripherals and hardware. There was insufficient margin and trading started to build a debt.

Volumes were increasing. HMRC had requested a meeting and he had cooperated fully with them. His suppliers disappeared. HMRC said it appeared to be carousel trading. There was a very large VAT debt. HMRC moved to wind the company up. He had not been aware of any tax issues. His suppliers had “convinced” him it was legal.

He had not had the resource to fight the case so had accepted disqualification. He had zero funds and had personally lost redacted investment in the business. When the disqualification was offered, he did not know how long it was for.

Mr Mirza had not declared this history on the various applications. He had not considered it relevant. He had saved for his transport manager qualification as it offered a new career. He was completely innocent of any wrongdoing. He had been “led up the garden path”. He had no criminal inclinations. He had a history of good management jobs. The circumstances were described in the liquidators meeting notes. I allowed 5 days for those to be provided. They have not been. I have, though, received a character reference from his current employer.

3. FINDINGS OF FACT AND DETERMINATION

The application to be an operator asks for all insolvency history for all relevant parties including the transport manager. An application to become a transport manager for an existing operator does not ask insolvency questions of the applicant transport manager. Mr Mirza cannot be criticised for not having declared his background.

Operator licensing is built on trust. A critical person is the transport manager. Article 6 of EU Regulation 1071/2009 says the following:

The conditions referred to in the first subparagraph shall include at least the following:

(a) that there be no compelling grounds for doubting the good repute of the transport manager or the transport undertaking, such as convictions or penalties for any serious infringement of national rules in force in the fields of: (i) commercial law; (ii) insolvency law; (iii) pay and employment conditions in the profession; (iv) road traffic; (v) professional liability; (vi) trafficking in human beings or drugs; and

Mr Mirza has been disqualified for nine years from acting as a company director due to admissions made in relation to a complex VAT fraud. I am told that he could not afford the resources to fight the disqualification. I can find no reason to go behind the admissions made in another jurisdiction, not least because the type of fraud accepted is highly complex. The liquidators report indicates that HMRC was owed £946,297 in unpaid VAT.

The disqualification order arises from wrong-doing that led to a very significant amount of VAT going unpaid and I find that to be a penalty for a serious infringement of commercial law, as described in the Regulation. This finding would support a finding of loss of good repute – or, more correctly, that Mr Mirza has never been of good repute in the first place.

The Insolvency Service guide “Effects of a Disqualification Order” includes the following amongst the proscribed activities:

Management

The order or undertaking prevents you taking part or being concerned in the management of a company. ‘Management of a company’ is not confined to management of the internal affairs of that company. A manager may be someone in a position equivalent to that of a director (without having been appointed as such) or below director level.

Being concerned in the management of the company may include such activities as:

• Undertaking tasks in relation to the company’s business, for example ordering, paying or negotiating with suppliers or customers, renting or buying business premises, hiring or firing employees, dealing with the company bank account

• Acting as a management consultant

• Acting in a governing role within the company

• Taking executive decisions as to the company’s affairs or making it seem that you are in a position to take such decisions.

This list is not meant to be complete. Many other acts may, depending on the circumstances, amount to taking part or being concerned in the management of a company.

Article 4 of EU Regulation 1071/2009 describes the role of the transport manager as being to “effectively and continuously manages the transport activities of the undertaking”. Article 4(2)(b) defines that further “The tasks to be specified shall comprise, in particular, those relating to vehicle maintenance management, verification of transport contracts and documents, basic accounting, the assignment of loads or services to drivers and vehicles, and the verification of safety procedures;” So a transport manager is a senior manager within the business on whose instruction the business is expected to act. The responsibilities certainly “amount to taking part or being concerned in the management of a company” and Mr Mirza is precluded from exercising them. This would indicate that Mr Mirza cannot exercise his responsibility for continuous and effective control and the Upper Tribunal has identified this as amounting to a loss (or inability to establish) good repute. It also appears that Mr Mirza is breaching insolvency law, albeit there has been no penalty.

Having made these findings, I go on to consider whether a finding of loss of good repute is disproportionate. Mr Mirza has a full-time job as an operation manager in a manufacturing facility. His transport manager roles are relatively minor in terms of his income. A finding of loss of good repute does not lead to a disproportionate outcome.

These are an unusual set of circumstances. There is no evidence that Mr Mirza is anything other than competent as a transport manager. In Aspey Trucks T/2010/49, speaking about an application but I find equally relevant here, the Upper Tribunal commented:

“the public, other operators, and customers and competitors alike, all expect that those permitted to join the industry will not blemish or undermine its good name, or abuse the privileges that it bestows. What does “Repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry?”

The role of the transport manager is sometimes likened to the eyes and ears of the regulator within a transport business. I find that properly interested, right-minded people would find abhorrent the notion of a person who has accepted a major involvement in a near £1 Million tax fraud being allowed to be the person responsible for the continuous and effective management of one or more transport operations.

I find that Atif Mirza has lost his good repute as transport manager. Pursuant to that finding, he is disqualified from acting as such until 17 June 2024 and his re-entry will require that he has recently attended at least a 2-day transport manager refresher course.

Kevin Rooney

Traffic Commissioner, Western Traffic Area

19 March 2021