A company director who failed to keep proper records has been disqualified for 11 years following an Insolvency Service investigation which found he had made a wrongful claim for a £285,000 VAT repayment, while it was not possible to establish whether the company’s stock and trading were legitimate
Amandeep Lalli was the director of Pioneer Traders (UK) Ltd from October 2009 to liquidation in April 2015.
The Insolvency Service found he had failed to maintain and/or preserve adequate trading records or, in the alternative that he failed to deliver up such records as were maintained or preserved during the period of his directorship.
As a result the official receiver was unable to establish the full nature of Pioneer’s trading activities during the period of Lalli’s appointment and whether these were connected with genuine trading purposes.
It was not possible to establish the stock that the company held and traded in was legitimate, or to establish extent of cash transactions and whether Pioneer should have registered as a high value dealer with HMRC’s anti-money laundering unit.
The Insolvency Service could not determine the full extent of purchases, sales, income, expenditure, and thereby determine Pioneer’s excise and VAT liabilities, or verify Pioneer’s VAT repayment claims for August and November 2011, and its subsequent understated returns.
In addition, the investigation could not verify the true amount owed to HMRC for excise and VAT, or account for acquisition and disposal of assets, or establish the level of remuneration and other benefits taken by Lalli as the sole director of Pioneer.
The investigation found that Lalli caused Pioneer to make wrongful declarations for VAT including repayment claims for the August and November 2011 VAT periods totalling £285,848, and to fail to declare goods and trading on which excise and VAT was due.
Tony Hannon, the official receiver in the public interest unit south, part of the Insolvency Service, said: ‘Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency.
‘Without such records, it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.’
Report by Pat Sweet