Boss of crashed firm owing £17m admits trading fraudulently
Spectacular downfall for payroll firm which once sponsoredWolves
TAlthough deserved, the last two years have been really difficult, and resulted in me losing everything that I’d ever worked for.
HE dramatic rise and fall of a leading UK payroll company which crashed owing the taxman £17 million has been revealed after its boss admitted it traded fraudulently.
Former Wolverhampton Wanderers sponsor David Smith is managing director of Accountable Accountancy Ltd, which saw £100 million pass through its books during just 20 months of trading.
At its height, the Black Country company provided payroll services to 6,500 temporary workers and contractors across the country before its sudden collapse in December 2017.
Mr Smith, 46, and Birmingham accountant Nafeesah Abid, 31, later each had £6.3 million frozen in High Court actions brought by liquidators investigating the company’s demise.
A second Midland woman, Jane Dixon, 58, had £3 million frozen.
When contacted, Mr Smith admitted that Wolverhampton-based Accountable Accountancy had traded fraudulently.
“It was fraud, the model we used was mini umbrella payroll fraud,” he said. “I’d love to say I’m the innocent party, but I’m not. I got caught up in something that I should have known wasn’t right.”
He added: “I’ve got a lot of regret about what happened and that’s not just because I got caught and I’ve had it all taken off me.”
High Court action against Mr Smith has been ‘stayed’ after he paid back substantial sums to liquidators following the sale of his Wolverhampton home and two other properties.
Meanwhile, McLaren-driving Ms Abid was made personally bankrupt last September after she failed to pay liquidators’ £187,000 legal costs in obtaining freezing orders.
A court freezing order shows she received £1.3 million from the Wolverhampton-based company in the weeks before it crashed, after less than two years in business.
A Post investigation has found she also owned two unconnected companies which also collapsed and were later found to owe HMRC £11 million.
She denies any wrongdoing and declined to comment when contacted.
Accountable Accountancy Ltd, based in Tettenhall Road, operated between March 2016 and December 2017 when it applied for voluntary liquidation on insolvency grounds.
Clients had included an employment agency which placed workers with the NHS as well as FTSE 100 companies and leading recruitment agencies.
Liquidators appointed to close the business and probe the reasons for its insolvency have been investigating ever since, at a cost to date of £1.6m.
What they uncovered was a complex web of financial transactions that sparked a series of questions and court cases.
They are probing if funds or assets from the Black Country firm were deliberately diverted to defraud legitimate creditors, according to a High Court freezing order and claim.
The payroll firm never filed accounts before its sudden collapse, which came shortly after HMRC approached asking about its tax affairs, according to sources.
Liquidators found the company had paid Ms Abid £1.3 million between October 17 and November 16, 2017 – just before it applied to wind up on November 15, 2017.
A further £2.1 million was paid into a Dubai bank account belonging to Jane Dixon during the same period, cash which would later spark a separate Dubai court case.
No explanation as to why the women received the money has been made public.
Mr Smith confirmed that in addition to other monies, Accountable Accountancy paid him £1 million in two £500,000 payments on November 21, 2017, four days after the company applied to wind up.
He had signed a “Statement of Affairs” – listing the company’s assets and debts – for liquidators appointed to close the business and investigate the reasons for its collapse. But the document did not mention the £17 million owed to the taxman, documents filed to Companies House show.
David Smith
Liquidators also found four bank accounts containing £495,328 which had not been declared by the company on its Statement of Affairs – a legal document listing assets and liabilities when declaring bankruptcy.
No creditors came forward to claim the cash, despite an appeal.
Mr Smith said: “I take responsibility for the mismanagement and wrong doings that occurred whilst I was a director of Accountable Accountancy.
“I knew the models that the business operated were deemed as aggressive tax avoidance but we had taken professional tax advice and counsel’s opinion from a QC before implementation.
“But decisions were taken to change the way the model was run. Those changes resulted in the model being fraudulent.
“I should have questioned the decisions being made.
“To that end, I worked with and cooperated with the joint liquidators and authorities and to date through selling assets, have paid back the majority of the monies that I wrongfully received and will continue to work with them until my debts are cleared.”
In December 2019, the liquidators obtained a High Court order freezing £6.3 million assets of both Ms Abid and Mr Smith while investigations continued.
The court also froze £3m assets belonging to Ms Dixon, 58, who is thought to have been living in Middle Drive, Cofton Hackett, Worcestershire, and now thought to be in Dubai.
The liquidators brought proceedings against Ms Abid, Ms Dixon and Mr Smith under insolvency legislation powers relating to breach of fiduciary duty, fraudulent trading and creditor fraud.
A High Court order suggests liquidators suspected Accountable Accountancy had carried out transactions at an undervalue before its collapse. This is where business assets are sold lower than their true value or for a loss – actions which can be viewed as deliberately diverting assets away from creditors.
In another twist to the long-running investigation, Ms Abid sued Jane Dixon in Dubai’s Court of First Instance to claim the £2.1 million paid into her bank account by Accountable Accountancy Ltd.
She won the case but was ordered by the High Court in London to hand over the money to its rightful owner, Accountable Accountancy’s liquidated estate.
Meanwhile, High Court action was stayed against Mr Smith last March after an agreement was reached between him and the liquidators.
The agreement is understood to have involved the sale of his gated, four-bedroom home, Orchard Farm, in Lower Penn, which the High Court ruled belonged to Accountable Accountancy’s estate.
The luxury home has been sold for £675,000, with the proceeds set to be shared between the firm’s creditors.
In August, 2019, Mr Smith was banned from being a company director for eight years for “conduct while acting for Accountable Accountancy”, Companies House records show.
As for Ms Abid, court documents show her assets were said to include jointly owning four properties in Birmingham and having bank accounts in the UK and Dubai.
Other alleged assets were an ‘oyster perpetual Rolex’ and she was asked by liquidators about any jewellery, art and cryptocurrency she had.
Liquidator progress reports at Companies House show they have to date “identified a number of claims
that may be brought against individuals associated with the company”.
Ms Abid still drives a £150,000 McLaren and advertises her business services online.
But her descent into bankruptcy has been spectacular, with one source saying: “She boasted about being the youngest accountant to achieve the highest level of knowledge about the UK tax system. She loved flash cars and nice things.”
Former high-flying businessman Mr Smith’s reputation is now in ruins – and he candidly admits the true cost to him personally.
He said: “Although deserved, the last two years have been really difficult, and resulted in me losing everything that I’d ever worked for. The stress that this has caused my family and people close to me is something that I will always regret.
“It was never my intention to knowingly defraud HMRC.”
We put a series of questions to Ms Abid about Accountable Accountancy and her own businesses – Smart Contractors Ltd and NA Accountants Ltd – which had also collapsed, and the monies owed to HMRC.
She said she would be making no comment and asked us to “desist” with our probe or face potential legal action.
She later described all of our information as false “which can be proven by myself and HMRC”.
The accountant’s personal bankruptcy was due to expire in September but discharge was suspended.
An Insolvency Service spokesman said of Ms Abid: “I can confirm the bankruptcy discharge has been suspended so she remains subject to the restrictions of her bankruptcy. This was due to a lack of cooperation relating to certain asset information.”
The Birmingham Post was unable to contact Jane Dixon.