A new report has highlighted the dangers of not keeping proper accounting records while running a company.
Zaid Fares Al-Safee was the director of luxury automobile trader Exotic Global limited.
After around two years of trading, the company ran into financial trouble and was placed into Creditors’ Voluntary Liquidation.
As part of the agreement, an insolvency practitioner was appointed to break down the company finances and raise money for credits.
However, when asked, Mr Al-Safee was unable to provide accounting records. This led to a report being submitted to the Secretary of State highlighting the director’s lack of co-operation.
A subsequent investigation, led by the Insolvency Service, was unable to verify who had control of Exotic Global Limited’s affairs, as well as the income and expenditure of the company, remuneration, the acquisition or subsequent disposal of assets and the full nature of Exotic Global Limited’s trading activities.
A lack of accounting records was also unable to explain the purchase and sale of 14 luxury vehicles in excess of £1.2 million, VAT assessments totalling £498,106.80, the expenditure of a £318k loan, as well as the purchase and sale of 45 vehicles, totalling £354,553, and two personalised number plates totalling £40,023.
The director was called before the High Court in March 2018. He was banned from acting as a company director for a period of 13 years, due to his actions which led to a complete lack of accounting records.
Ken Beasley, Official Receiver for 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 Zaid Fares Al-Safee’s disqualification reflects this.”