The director of a car spare parts company has been disqualified for 7 years after he admitted transferring ?50,000 out of the company?s bank account.
Ayaan Khan was the sole director of Salford Auto Spares Ltd (SAS), which was incorporated in 2011 and traded in motor vehicle scrap parts.
The company latterly operated from leased premises in Swinton, Manchester, and went into liquidation on 4 May 2016 owing more than ?112,000 to creditors.
Following the company?s insolvency, the liquidators received claims from at least 98 individual customers, who said that they had made full payments in advance to SAS prior to the liquidation but goods had not been delivered to them at liquidation, leaving them as unsecured creditors. In particular, 64 customers notified the liquidators that they were owed amounts totalling at least ?18,869.
In giving the undertaking, Ayaan Khan did not dispute that between 12 April and 18 April 2016, when SAS was insolvent and was preparing to cease trading on 19 April 2016 before entering into liquidation, he caused the company to make transfers out of its bank account totalling ?50,180.
He also did not dispute that the transfers were not in the best interests of the company and were to the detriment of its creditors generally. Due to the lack of information provided, these transfers remain unexplained.
Ayaan Khan?s disqualification undertaking was accepted by the Secretary of State on 16 April 2018 and came into force on 7 May 2018.
The disqualification prevents Ayaan Khan from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company or limited liability partnership for the duration of his ban.
Robert Clarke, Head of Insolvent Investigations North at The Insolvency Service, said:
In full knowledge that the company was failing, this director has chosen to seek to defeat the claims of creditors, and his improper actions caused losses to others which were wholly avoidable.
Directors who show such blatant disregard for their fiduciary duties can expect to be investigated by the Insolvency Service and removed from the corporate arena for a lengthy period.