Friday 14:54
A director of two hair salons businesses that failed with total combined debts estimated at around £280,000 has given an Undertaking not to hold directorships or take any part in company management for seven years.
The Undertaking by Dipak Panchal, of Conway Crescent, Perivale, Middlesex, was given in respect of his conduct as a director of both Kut Klose Salons Limited ("Kut Klose"), which carried out business from premises at 16 Clapham Common Southside SW4 and 23 Camberwell Church Street, London SE5; and Newstyles Limited ("Newstyles"), which carried out business from premises at 44 Shelton Street, London, WC2H 9HZ.
Acceptance of the Undertaking on 5 July 2004 prevents Mr Panchal from being a director of a company or, in any way, whether directly or indirectly, being concerned or taking part in the promotion, formation or management of a company for the above period.
Kut Klose and Newstyles were placed into voluntary liquidation on 12 February 2002 with estimated debts of £200,120 and £78,080 respectively.
The Insolvency Service, on behalf of the Secretary of State for Trade & Industry, has responsibility (under Section (6) of the Company Directors Disqualification Act 1986) for the investigation of the conduct of directors of failed companies and for the disqualification of those who are considered unfit to be involved in the management of companies in the future.
Matters of unfit conduct, not disputed by Mr Panchal were that he:
* failed to ensure that Kut Klose maintained, preserved or delivered up adequate accounting records for the period from 7 October 2000 (when he was appointed as a director) to the date of liquidation. As a consequence, the Liquidator and the Insolvency Service have been unable to determine the assets, liabilities, expenditure and revenue of Kut Klose;
* caused or allowed Kut Klose to retain at least £100,715 in respect of Crown monies in the period October 2000 to 30 November 2001 and that he additionally caused Kut Klose to retain at least a further £4,817 from 1 December 2001 to the date of liquidation. Furthermore during the same period only one payment was made to HM Customs and Excise, in the sum of £1,800 on 21 December 2001 in respect of the VAT return for the quarter ended February 2001, and no payments were made to the Inland Revenue. As a result, at liquidation the Inland Revenue and HM Customs and Excise are together owed at least £103,868 compared against total trade creditors of £35,005;
* failed to ensure that Newstyles maintained, preserved or delivered up adequate accounting records. As a consequence, the Insolvency Service and the Liquidator have been unable to determine the assets, liabilities, expenditure and revenue of Newstyles;
* failed to comply with his statutory obligations to: * register and submit any VAT returns to HM Customs and Excise; * submit any returns to the Inland Revenue; * submit either the Annual Return due for the period ended 4 March 2001 or the accounts due for the period ended 12 February 2001 to Companies House.
Notes to editors
1. The Insolvency Service is responsible for both the regulation of Insolvency Practitioners and for company directors' disqualifications.
2. Insolvency Practitioners are authorised to deal with the administration of a range of company insolvency procedures including administrations and administrative receivership and creditors' voluntary liquidation. Insolvency Practitioners are required to report to the Insolvency Service on the conduct of company directors' work in each of these proceedings with a view to identifying behaviour that might make these directors unfit to be involved in company management in the future.
3. The Insolvency Service considers the insolvency practitioners reports and, where appropriate, will investigate the conduct of directors with a view to taking disqualification proceedings on behalf of the Secretary of State.
4. A court can disqualify directors from directorships and involvement in the management of companies for between two and 15 years for unfit conduct. If a director breaches a Disqualification Order they can be prosecuted and may be punished by a fine, a prison sentence of up to two years, or both, and may be made personally liable for the company debts.
5. Directors who accept that their conduct is unfit can give an Undertaking to the Secretary of State that they will not become involved as a director or in the management of a limited company for an agreed period of between two and 15 years. This avoids a court process, but the penalties for breach of an Undertaking are the same as for breach of a court order.
6. Companies House maintains a public register of disqualified directors that can be viewed at http://www.companieshouse.gov.uk. Addresses given are those correct at the time of the company failure, but may not now be current.
7. Members of the public who think that they know of any person who is acting in breach of a Disqualification Order or Undertaking should report that person's details to The Insolvency Service Disqualified Directors Hotline on 0845 601 3546 (24 hour message service). General enquires to The Insolvency Service should be addressed to the General Enquiries Help line on (020 7291 6895).
For further information about the Insolvency Service and disqualification see: http://www.insolvency.gov.uk
Regional news releases for Government departments can be viewed at http://www.gnn.gov.uk
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