Director banned for seven years for failing to provide ‘clean’ accounts

David Perfect, the director of a Cheshire-based cleaning company, has been disqualified for seven years for failing to keep adequate accounting records or pay some £144,000 due to HMRC, following an Insolvency Service investigation

The investigation found that Perfect failed to maintain, preserve and deliver up records that were adequate to explain the financial position of Northwich Cleaning Ltd, which was formerly known as BCS (Northampton Ltd), and had acted in breach of his fiduciary duties between December 2013 and June 2014.

In the absence of complete records it was not possible to determine the purpose of payments in the sum of £35,500 to Perfect. It was also not possible to verify the purpose of 83 cheque payments totalling £30,734 and whether these transactions and purchases from Northwich’s bank account had been for the benefit of Northwich.

The investigation found Perfect had acted in breach his fiduciary duties in that he caused or allowed Northwich to enter into transactions totalling at least £52,600 to an estate agent in respect of a London rental property and £40,000 to a company for financial advice, that were either made when Northwich was insolvent or caused it to become insolvent.

These payments were made at a time when Northwich had failed to pay creditors, notably HMRC, which was owed £144,831 when the company went into liquidation in July 2014 with an estimated deficiency of £177,281.

Robert Clarke, head of company investigations at 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 a full account of transactions it is impossible to determine whether a director has discharged their duties properly, or is using a lack of documentation as a cloak for impropriety.’

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