Decision

Decision for The Pentagon Food Group (OD0265609)

Published 9 February 2021

West Midlands Traffic Area

Decision of the Traffic Commissioner

Public Inquiry held on 8 January 2021

1. Background

1.1 Operator details and licence history

The Pentagon Food Group (“Pentagon”) holds a standard international goods vehicle operator’s licence (OD0265609) for 20 vehicles and five trailers. There are 13 vehicles in possession. The licence was granted in August 2000.

In May 2020, the central licensing office (CLO) in Leeds received an application to add new directors Ashfaq Khan and Arfat Khan to the licence, alongside existing director William Bullock. A separate application was also received to nominate a new transport manager Roger Key, replacing previous TM Neil James.

In the course of considering this application it was noted that Ashfaq and Arfat Khan had been disqualified for 12 months by my predecessor Nick Jones in 2015 from holding an operator’s licence (and from being directors of a company holding one). TC Jones had revoked the licence of Freshways Wholesale Foods Ltd, a company of which the Khans were directors, after finding that the company had failed to maintain vehicles properly and had failed to analyse drivers’ hours.

CLO was also informed that, following the liquidation of Freshways, Ashfaq and Arfat Khan had been disqualified in July 2018 under the Company Directors Disqualification Act 1986, for 6.5 years and 5.5 years respectively, from acting as directors of any company. However, in April 2020 the Court had permitted the Khans to act as directors of Pentagon under various conditions mostly relating to financial management. One condition stipulated that Mr Bullock must remain as a director: if he were to cease acting as such the Khans must within 14 days appoint a similarly qualified individual as a director or apply to the Court for directions.

2. Public inquiry

Given the Khans’ history, I decided to hold a public inquiry to consider the applications to nominate the two new directors and transport manager. The call-up letter was issued on 3 December 2020 and the inquiry was held on MS Teams on 8 January 2021. The nominated transport manager Roger Key was not called to consider his good repute, but was invited to attend in order to explain how he was ensuring compliance.

The call-up letter requested that the company supply various records relating to maintenance and drivers’ hours compliance. Among the records requested were missing mileage reports and driver infringement reports. The records were delivered to my office in Birmingham and were initially examined there by my senior team leader Andy Booth (himself a qualified transport manager). Among the documents provided were various driver infringement letters – letters drawing the attention of drivers to instances of driving without a tachograph. The letters had various dates in June, August and September 2020. They had been signed by the recipient drivers (although not by the transport manager or any other manager, as is usually the practice). Mr Booth drew my attention to the fact that the majority of the drivers’ signatures were all in the same florid script and differed from the same drivers’ signatures elsewhere (eg on driver defect reports).

I asked Roger Key whether he had in fact issued these letters to drivers and whether they had signed them in front of him. He assured me that this was the case. I drew his and the Khans’ attention to the remarkable similarity of the various drivers’ signatures and asked the question again. After a short adjournment I was told that on some occasions the letters had been left on the office counter for drivers to sign when they returned and that no one had noticed the similarity of signatures. I explained the potential serious consequences for the company and transport manager of falsifying records and gave them a further and final opportunity to own up. The account that drivers had signed in the absence of managers was maintained.

I asked the Khans to conduct an investigation upon their return to the office to find out what exactly had happened. I held my decision in abeyance pending the outcome of their research. On 15 January the company sent my clerk witness statements from transport manager Roger Key and director William Bullock. The statement from Mr Key apologised for having given me the impression that he had witnessed the drivers signing their infringement reports. The statement from Mr Bullock acknowledged that the operator had had no system for identifying and tackling missing mileage until, in preparation for the public inquiry, it had commissioned an analysis by the RHA which had identified instances of missing mileage. Mr Bullock had then sought explanations from the drivers for these instances; the explanations had been typed up as infringement reports and, because of lack of time and other pressures, had been signed with the driver names either by himself (one letter) or his assistant (five letters). Mr Bullock accepted that this was a “massive error of judgement” and that he should have spoken up when given the opportunity to do so at the inquiry. He had remained silent out of embarrassment.

3. Considerations

The operator licensing system is based on trust. A traffic commissioner must be able to trust operators to comply. Falsification of documents presented to a public inquiry seriously undermines that trust and is itself an offence under Section 38 of the 1995 Act. It is quite clear that the driver infringement letters were presented to me to give the impression that, throughout 2020, instances of drivers driving without cards had been identified and drawn to the attention of drivers. This was simply not the case. The reality was that missing mileage had not been identified (or therefore addressed) at all until immediately before the public inquiry.

I bear in mind that this public inquiry was called to consider whether two directors who had been disqualified first from holding an operator’s licence and subsequently from acting as directors for any company at all, had now been rehabilitated. It is particularly difficult to comprehend therefore how – in seeking to convince me that the directors were rehabilitated - the company could so mismanage matters as to present false documents in an attempt to cover up its inadequate monitoring of drivers’ hours. It is especially ironic that the director in whom the Court appears to have placed some degree of trust, William Bullock, was the director primarily responsible for the act of falsification. Having said that, given what was at stake, I would have expected Ashfaq and Arfat Khan to have taken a particular interest in the accuracy and veracity of the documents submitted to the inquiry. Clearly they did not.

4. Findings

It is inevitable that the presentation of false records to a public inquiry with intent to deceive will involve the loss of good repute. I find that the company’s repute is lost, pursuant to Section 27(1)(a) of the 1995 Act.

Because Roger Key was not called to consider his good repute, I cannot make a finding, in this decision, that he is not of good repute (although I may call him to a subsequent hearing to discuss this). But I make a finding that he is clearly not exercising the legally required continuous and effective management of the transport activities of the business. He has been acting as the transport manager (in advance of his nomination being approved) since 5 May 2020. He has clearly failed to manage drivers’ hours in a way which enabled driving without a card to be identified, since it was only in the run-up to the public inquiry that any missing mileage analysis has been done. Worse, he initially sought to persuade me that the driver infringement letters were genuine and that he had been present when drivers had signed for them. He is not a man in whom I can place any trust and I therefore refuse the application for him to be the transport manager on the licence. The operator accordingly lacks the required professional competence (Section 27(1)(a) of the 1995 Act also refers).

5. Balancing Act and Priority Freight and Bryan Haulage questions

In coming to these decisions I also weighed some more positive factors in the balance. The maintenance records were on the whole satisfactory. Mr Arfat Khan is studying to take the transport manager CPC examination. But the positive factors are heavily outweighed by the creation and presentation of false documents to the inquiry by a director of the company and the failure of the other directors and transport manager to detect and prevent this. That is why I conclude that the answer to the Priority Freight question of how likely it is that the company will comply in the future is “highly unlikely”. A negative answer to that question tends to suggest an affirmative answer to the Bryan Haulage question: does the company deserve to go out of business? Because of its attempts to deceive me through the creation of false records, I believe that it does.

6. Conclusions

6.1 Operator licence revoked

I have found that the company lacks both good repute and professional competence. Revocation of the operator’s licence is therefore mandatory under Section 27(1)(a) of the 1995 Act. Revocation is also ordered under Section 26(1)(f) of the Act – failure to fulfil the undertaking to ensure the observance of the rules relating to driver’s hours and tachographs. The revocation will take effect at 0001 hours on 21 February 2021.

6.2 Company and director- disqualification

For the reasons outlined above, and having performed the same balancing act described therein, I conclude that the company and William Bullock should be disqualified under Section 28 from holding a licence in the future. I have held back (just) from so disqualifying Ashfaq Khan and Arfat Khan because they do not seem to have been the prime movers in the deception or party to it (although they should have taken more interest in the records submitted to the inquiry). In deciding upon the length of the disqualification, I have taken account of paragraph 100 of the Senior Traffic Commissioner’s Statutory Guidance Document 10. This posits a starting point of between one and three years for a first public inquiry (which this is), but a period of between five and ten years where there has been falsification of records encouraged by the company. In this case I am imposing a disqualification period of two years, at the lower end of the applicable scale, to give some recognition to and credit for the fact that the company and Mr Bullock did in the end come clean about what they had done and did not seek to perpetuate the lie.

Nicholas Denton

Traffic Commissioner

21 January 2021