Salem Sinawi and Ian Ashbolt, the directors of Newcastle-based lettings agency Central Residential Ltd (Central) - have been banned from being directors for a total of 10 years for failure to secure rental deposits or pass on rent money to clients.

Mr Sinawi, 26, of Jesmond in Newcastle and Mr Ashbolt, 57, of Winchester in Hampshire, were disqualified for seven and three-and-a-half years respectively, following an investigation by the Insolvency Service.

The two directors have given undertakings to the Secretary of State for Business, Innovation not to be directors or manage or control a company until after the disqualifications end. Mr Ashbolts disqualification started on 24 September 2013 while that of Mr Sinawis will start on 31 October 2013.

The investigation found that Mr Sinawi ran Central from offices in Jesmond, Newcastle and failed to properly secure rental deposits provided by tenants, as required under the Housing Act 2004.

As a consequence, landlords had to reimburse tenants over 64,000 out of their own pockets. In addition, the company collected over 30,000 in rent from tenants which was not passed on to the landlords.

Mr Ashbolt, who is Mr Sinawis step-father, was a registered director at Companies House, despite living over 300 miles away in Hampshire. Mr Ashbolt failed in his legal responsibility as a director to ensure that the company was run properly.

Robert Clarke, Head of Insolvent Investigations North, which is part of the Insolvency Service said:

Companies which handle client money must ensure that they follow the correct procedure while entering business transactions on their behalf.

These directors failed to pass on rent money collected on behalf of their clients, or indeed secure deposits when tenants moved in to the properties in the first instance.

People should be aware that being named as directors even when not involved in the day-to-day running of a business means that they are responsible for the proper running of a company and will be held to account.

Directors who fail in their duties will be investigated by the Insolvency Service and removed from the business environment for a lengthy period.