Lancashire-based John Coates has been disqualified for 13 years for selling duplicated carbon credits and then trying to cover it up.
John Coates has been disqualified from acting as a director for 13 years for his actions. His son, Robert Coates, has also been disqualified, with both following an investigation by the Insolvency Service.
The investigation found that John Coates sold duplicated carbon credits to the value of 222,145 and then used fictitious entries in a companys accounting records in an attempt to disguise 343,000 paid to him and his wife. He did so in the full knowledge that the company would either have to replace these or repay the money received from the customer. Within two months of the payments being made, the company went into Liquidation with debts of 301,423.
John Coates, although not formally appointed a director of Green Deal Advice 247 Limited, was the dominant driving force behind the company. He was involved in the negotiations with energy companies to supply carbon credits in order for them to comply with the Governments Energy Company Obligations (ECO).
Between 28 October 2013 and 6 January 2014, Green Deal Advice 247 Limited supplied 2,000 tonnes of carbon measures to one energy company for which it had received 222,145. Unbeknown to the customer, these measures had already been supplied to another energy company, and thus were duplicated.
John Coates was advised by the customer of this issue, and made aware of the need to replace these carbon measures or ultimately to repay the monies received. Nonetheless, between 12 June 2014 and 24 July 2014, 343,000 was transferred from Green Deal Advice 247 Limiteds bank account to accounts in the name of John Coates and that of his wife. The companys accounting records were amended to show fictitious payments for carbon measures supplied by unconnected parties. When challenged by the Liquidator regarding a number of these transactions John Coates produced bogus invoices to the value of 196,000 in an attempt to justify and explain them.
John Coates and his son Robert Lee Coates, who was the appointed director of Green Deal Advice 247 Limited throughout its trading life, also failed to maintain accounting records sufficient to show that a further 276,423 was expended for the benefit of the companys trade. John and Robert Lee Coates had also failed to explain the whereabouts of a company vehicle purchased for 33,500, which was still registered to Green Deal Advice 247 Limited as at the date of Liquidation.
The Secretary of State for Business Innovation and Skills accepted undertakings from John Coates and Robert Coates not to act in the management, formation or promotion of a limited company for a period of 13 years and 9 years respectively commencing 29 April. Robert Clarke, Head of Insolvent Investigations North, commented:
There was a very clear intention on the part of the directors to disguise their true actions by falsifying the companys accounting records to give a completely different picture as to what had occurred. Directors who put their own personal financial interests above those of customers and creditors damage confidence in doing business and are corrosive to the health of the economy.
This ban should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment.
The keeping of proper accounting records is a pivotal duty for directors and there is no place in the business environment for those who neglect their responsibilities in this area. In this particular case, it was essential that the directors accounted for monies purportedly expended purchasing valuable trading assets by the company.