The former director of an insolvent waste business based in Warrington has been banned for seven years and handed a six-month suspended sentence over unexplained transfers worth more than £500,000.
The court heard that Mr Smith failed to share adequate accounting records despite requests from both the insolvency practitioners
Lee Smith, 42, was a director of Smith Waste and Recycling (SWR) before the company entered into a Creditors Voluntary Liquidation in November 2014.
Once independent practitioners took over the company, it was said in court that Mr Smith failed to share adequate accounting records despite requests from both the insolvency practitioners and investigators from the Insolvency Service, a government agency connected to the Department for Business, Energy & Industrial Strategy (BEIS).
Unexplained
Investigators say they were unable to explain cash withdrawals from SWR’s bank accounts over the course of a year between September 2013 and September 2014, totalling just over £430,000, and whether they represented “genuine business expenditures”.
Due to Lee Smith’s “lack of co-operation”, investigators say they were also unable to explain more than £86,000 worth of transfers between January and October 2014 made to the accounts of two companies connected to Lee Smith, as well as his remuneration and what were the company’s assets and liabilities at liquidation.
‘Unacceptable’
Commenting on the prosecution, Arwel Jones, director of criminal enforcement for the Insolvency Service, said: “Lee Smith’s behaviour throughout the liquidation has been highly unacceptable. Failing to deliver any form of company records means that his creditors are at risk of losing a significant amount of money.
“A seven year disqualification order handed down by the courts is a significant ban, which should serve as a deterrent to those directors who fail to conduct their business affairs in accordance with the law.”
Mr Smith appeared at Liverpool Court on 20 September where he was ordered to perform 250 hours of unpaid work and pay prosecution costs of £8,901.
A disqualification order has the effect that without “specific permission of a court”, someone with an order can’t act as a director of a company, take part in the promotion, formation or management of a company or be a receiver of a company’s property.
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