Boss failed to explain £500,000 of cash withdrawals and bank transfers

Blog Insolvency Liquidation

After failing to deliver company records explaining £500,000 worth of suspicious bank transfers and cash withdrawals former waste boss has been disqualified for seven years.

Lee Smith appeared at the Liverpool Court where he was not only disqualified for seven years, but he also received a 28 week suspended prison sentence, as well as being ordered to perform 250 hours of unpaid work, alongside paying £8,901 in prosecution costs.

Smith Waste and Recycling (SWR) in Warrington entered into a Creditors Voluntary Liquidation in November 2014.

Upon doing so, independent insolvency practitioners were appointed to process the liquidation of the company. However, Director, Lee Smith failed to share adequate account records despite several requests from both the insolvency practitioners and later, investigators from the Insolvency Service.

Failure to deliver the required information requested from the liquidator was clear evidence of misconduct, and in Mr Smith’s case, this helped to explain the whereabouts of £517,000 from SWR’s accounts.

Over a course of a year between September 2013 and September 2014 just over £430,000 cash withdrawals were made from the SWR’s bank accounts, after investigation, the Insolvency Service were unable to explain these transactions.

Alongside this, there was a lack of co-operation from the former Director, which resulted in the investigators unable to explain more than £86,000 worth of transfers made to two accounts in connection to Lee Smith.

Arwel Jones, Director of Criminal Enforcement for the Insolvency Service, 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.”