Mohammed Rashid Qajar and Sally Oakley, directors of Secureticket (UK) Limited, who sold online tickets for the 2007 and 2008 Cambridge Folk Festival, have been banned from acting as company directors for ten years each for failure to hand over 618,000 to Cambridge City Council (CCC).
The disqualifications follows an investigation by Company Investigations (South) at The Insolvency Service.
Secureticket (UK) Ltd failed to keep the funds it received from ticket sales in a protected client account as specified in its contract, therefore breaching its legal obligations to CCC. No money was ever paid to the council which had to write off the debt earlier this year.
Mr Qajar, 47, and Sally Oakley, 49, both of Winchester, Hants were due to defend themselves at a five-day trial commencing on Monday 26 November 2012 but they decided, virtually on the court steps, that they would offer undertakings instead. These undertakings, given to the Secretary of State for Business, Innovation and Skills, prohibit either of them from acting as directors of a limited company for ten years, from 13 December 2012.
The Insolvency Service investigation was carried out after Secureticket (UK) Ltd entered voluntary liquidation in January 2009, owing more than 4.5m to its creditors.
In 2008, Secureticket sold 678,125 worth of advance tickets for the festival which was held on the first weekend of August of that year. After deducting their commission, they should have put 618,000 in a protected account and paid the council by 11 August 2008. But on that date the balance on this client account was just 15,545.
After 11 August, further transactions led to more money being paid into this client account but not a penny of that was ever paid to the council.
Of the 530,401 that was paid out of the client account:
172,328 was transferred to Securetickets general business account;
121,458 was then paid on from this general business account to the directors or to companies connected with them and;
31,738 was paid directly from the client account to these directors or their connected companies.
Commenting on the case, Mark Bruce, a Chief Examiner at The Insolvency Service said:
Many of the directors we investigate have usually caused material financial harm to the companys creditors but this case is especially grave because the damage will have reverberated through a community.
People living in the Cambridge area will have suffered indirectly from a reduction in funds available to the council for the crucial community services it provides. These services are relied upon by some of the most vulnerable in our society.
These ten-year disqualifications should serve as a reminder to all company directors of the potential consequences of failing to maintain proper professional standards.
The message is stark; if you run a business in a way that is detrimental to either its customers or its creditors you will be in our sights. The Insolvency Service will investigate you and seek to remove you from the business environment.
Throughout the investigation the Insolvency Service worked closely with the council, especially Simon Pugh, Head of Legal Services at the CCC who was due to give testimony at the trial before the case was withdrawn.
Rod Cantrill, Executive Councillor for Arts, Sport and Public Places commented: “We very much welcome the outcome of the case, which is a further indication of the shameful way that SecureTicket (UK) Ltd and its directors behaved towards Cambridge City Council and its residents.
The disqualification sends out a strong message and offers protection to the public against the business activities of these directors for a long time.
Obviously this does not mean we will get the money back but we will continue to use all practicable measures to seek repayment of our money for the residents of Cambridge.
Finally we wish to thank the Insolvency Service for its tenacity in pursuing this case to a successful conclusion.”