Trio of directors at debt management company disqualified
2 Aug 2017
A third director of Manchester-based debt management company Debt Connect (UK) Ltd has been disqualified as a result of an Insolvency Service investigation following the company’s collapse into liquidation owing some £150,000 to creditors
2 Aug 2017
Rahul Sharma has been banned from being a company director for nine years, after the Insolvency Service found he had caused funds totalling £42,920 to be transferred to the company’s current account, of which at least £25,929 was paid to another company controlled by Rahul Sharma, and individuals connected to him.
Debt Connect was supposed to look after the interests of clients who were in financial difficulties. However investigators found that during the time when Rahul Sharma was directing the company, it did not make all payments due to clients’ creditors, including printed cheques not posted out totalling £32,465 which were in a box delivered up to the liquidators, nor did it pay refunds due to clients of at least £9,267.
In addition, Debt Connect had lost its Consumer Credit Licence and been instructed by a tribunal to return payments received from clients which would not be distributed to their creditors.
The latest disqualification follows on from earlier legal action last year, which saw Rajiv Sharma sign an eleven year disqualification in which he did not dispute that he acted as a director of Debt Connect between at least October 2013 and October 2014 whilst he was already subject to disqualification.
He was disqualified from acting as a director or being concerned in the promotion, formation or management of a company for six years from 13 March 2012.
In addition, Stephen Bradbury signed a four year disqualification undertaking. He had been appointed as a director of Debt Connect in October 2013 but abrogated his responsibilities by taking no active role in the company, other than to sign paperwork when instructed by others. This allowed Rahul Sharma to make some of the illegitimate payments.
Commenting on the disqualifications, Robert Clarke, investigations group leader at the Insolvency Service, said: ‘Debt Connect’s customers were vulnerable individuals who had already experienced financial difficulties and had turned to a debt management company with the expectation that the resolution of their problems would be paramount.
‘However, there were serious failings within the company; Rahul Sharma failed to ensure all payments were made to clients’ creditors and defied a clear tribunal instruction, and Rajiv Sharma blatantly ignored his existing disqualification. The lengthy bans these men have accepted are wholly justified.’
When Debt Connect went into liquidation in October 2014, the company disclosed assets estimated to realise £1,000, and liabilities to creditors of £157,842