Firm director sentenced for not explaining transactions
ACOMPANY boss based in Daresbury has been banned as a director for seven years and ordered to complete 250 hours unpaid work after he failed to explain £500,000 of ‘suspicious bank transfers and cash withdrawals’.
Lee Smith, 42, who was a director at Smith Waste And Recycling (SWR) based in Daresbury Park before the company entered into a voluntary liquidation in November 2014, was also sentenced to 28 weeks in prison, suspended for 18 months, and ordered to pay £8,901 in costs at Liverpool Crown Court.
A spokesman for The Insolvency Service said independent insolvency experts were appointed to take charge of liquidating the company, but Smith, of Woodchurch Road, Prenton, failed to share adequate accounting records despite several requests from both the liquidation team and later, Insolvency Service investigators.
The spokesman said failure to deliver information requested by the liquidator while winding up a company was evidence of misconduct and in Smith’s case, it would have helped to explain the whereabouts of funds from SWR’s accounts totalling more than £517,000.
Investigators 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 Smith’s lack of co-operation, investigators 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.
At an earlier court hearing on July 24 at Wirral Magistrates’ Court, Smith pleaded guilty to one count of misconduct in the course of winding up and another count of failing to keep accounting records.
Arwel Jones, The Insolvency Service’s director of criminal enforcement, 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.” ●