Essex businessman disqualified from being a director owing creditors £3.18m

The director of an Essex based cash & carry business has been disqualified by The Insolvency Service and banned from being a director for seven years.

Mr Nazim Osman ran Cube Cash & Carry Limited in Barking which traded predominantly in beers, wines and spirits. The company was wound up on 3 December 2008 owing creditors at least £3,188,023 following a petition by HM Revenue & Customs which was owed £2.9m by the company.

Following an investigation by The Insolvency Service’s Public Interest Unit into the accounting and management practices of the company, Mr Osman, 54, gave an undertaking to the Secretary of State for Business, Innovation and Skills not to act as a director of a limited company until at least 17 October 2019.

Whilst Mr Osman was a director of Cube Cash & Carry Ltd the company failed to keep proper accounts and deal with VAT payments which caused the company to trade to the detriment of HMRC.  Due to the poor state of accounting records investigators were unable to determine how much was owed in PAYE, National Insurance, Corporation Tax and VAT. Further, both the Official Receiver and the liquidator were unable to establish the reasons behind multiple payments from Cube’s bank account, including £200,000 paid to the company’s manager and £82,000 paid to a third party. Investigators were also unable to establish what stock and equipment on site was owned by the company at the date of the winding up.

Ken Beasley, Official Receiver at the Public Interest Unit, commented:

“Mr Osman failed to maintain, or preserve, proper accounting records and as a consequence the investigations of the Official Receiver and the liquidator have been severely hampered.

“By failing to deal properly with the VAT affairs of the company Mr Osman also caused the company to trade to the detriment of HM Revenue & Customs. In doing so Mr Osman’s conduct fell far below that expected of directors of a limited company.”

The Insolvency Service has a range of enforcement powers at their disposal and this case demonstrates that where appropriate, they will not hesitate to utilise said powers.

If you are owed an outstanding amount by a customer or client, Holmes & Hills Solicitors has a team of debt recovery solicitors providing debt recovery services to businesses across Essex and Suffolk.