The director of an Essex security company has been disqualified for eight years having failed to ensure the company maintained proper books and records, after an Insolvency Service investigation found it was not possible to verify over £600,000 of cash withdrawals from the business
Lee Garvey was a director of Security Management Services Ltd (SMS), which provided security services to private and commercial clients.
The company was incorporated in March 2015 and went into creditors’ voluntary liquidation (CVL) in May 2017, owing £413,156.
An Insolvency Service investigation following the liquidation found during that period Garvey failed to ensure that SMS maintained and preserved adequate accounting records, or in the alternative, failed to deliver up the books and records to the liquidator.
As a result, investigators were not able to verify Garvey’s explanation for cash withdrawals totalling £627,550 made between 29 May 2015 and 2 March 2017 and whether they were used to pay self-employed sub-contractors or made in the ordinary course of business.
Additionally, investigators could not establish the employment status of SMS’s security guards and if they held valid licences with the Security Industry Authority to carry out security work, as well as verifying Garvey’s statement that each guard had a valid licence to carry out work.
It was also not possible to establish why SMS was registered for VAT on 10 June 2015, but failed to charge VAT on its sale
Sue Macleod, chief investigator of insolvent investigations Midlands & West at the Insolvency Service, said: ‘Maintaining and keeping adequate accounting records is a legal requirement for all companies. Failure to do so is serious misconduct and the length of Mr Garvey’s disqualification reflects this.’
Report by Pat Sweet