Insolvency Service warns about the dangers of keeping “inadequate” records


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A restaurateur has been handed an eight year ban from holding a directorship following an investigation by the Insolvency Service.

A hearing was told that Ambia Begum, a director of Lochnagar Indian Brasserie, had failed to keep adequate financial records for her Aberdeen-based eatery.

The 28-year-old had been forced to close her business in July 2014 after HM Revenue & Customs (HMRC) issued a winding-up petition.

When the restaurant closed its doors it had debts exceeding more than £420,000.

A subsequent investigation by the Insolvency Service found that the company’s books were not up to standard, making it impossible to verify expenditure or receipts.

Additionally it became apparent that it wouldn’t be possible to establish the level of liabilities owed to the tax authority.

Begum was disqualified from holding a directorship until 2024.

Robert Clarke, the Insolvency Service’s head of company investigation, said: “Directors who operate cash-based businesses have to maintain sufficient records to explain where these monies have gone and, following insolvency, make sure that such records are delivered up for scrutiny by the relevant bodies.

“By failing to do this the public cannot be sure that all funds received by the company were used for legitimate purposes.

“The substantial period of this disqualification reflects the fact that when a company fails to keep adequate financial records it is simply not possible to determine whether there has been other, more serious, impropriety in relation to the management of its affairs.”