Four haulage directors “lacking commercial morality” have been disqualified for a total of 32 years for failing to maintain records that explained their firm’s financial transactions.
Birmingham-based Callow Transport, which held an international licence authorising 12 HGVs, went into liquidation in February 2015.
An investigation by the Insolvency Service (IS) uncovered evidence that Ashley Callow, Adrian Busby, Colin Callow and Elizabeth Dawe had diverted income to an associated firm to the detriment of Callow’s creditors.
The IS was unable to explain the purpose of net payments totalling £100,839 made to the associated companies from Callow Transport’s bank account in the seven months before its closure, or the reason why cash withdrawals totalling £187,037 were drawn in the five weeks before trading ended.
Furthermore, questions remained about the circumstances surrounding the disposal of seven vehicles.
However, the IS discovered that having received notice of cancellation in November 2014, the company enabled an associated business to raise invoices and receive income totalling £326,634 in respect of work Callow Transport had undertaken under its main contract.
Then, having diverted this income and just four days before trading ceased, Callow Transport made an advance rent payment of £25,032 for premises it shared with an associated company, and from which the associated company would benefit, before entering into creditors’ voluntary liquidation with a deficiency of £245,567.
It was also found that Colin Callow and Elizabeth Dawe had been acting as directors despite having resigned.
Ashley Callow, Colin Callow, Busby and Dawe were each disqualified for eight years.
Robert Clarke, IS Investigations group leader, said: “Directors like these – who favour connected companies over the interests of legitimate creditors when their company is in financial difficulty, removing assets and funds leaving creditors high and dry – are not only in breach of a fundamental fiduciary duty but lacking in commercial morality.”