West Midlands traffic commissioner (TC) Nick Denton has refused to grant a utilities firm an O-licence after finding it was a ‘phoenix’ for a liquidated business.
Christopher Welch, sole director for Groundwork Utility Structures, had made several false declarations on the company’s application for a restricted O-licence, including hiding his links with companies that had gone into liquidation.
The company’s application was received by the Office of the Traffic Commissioner (OTC) the day before linked company, Groundworks & Utility Services, went into liquidation on 12 August.
The O-licence held by Groundworks & Utility Services was also revoked by the TC following a public inquiry (PI) in December.
Welch also failed to tell the OTC that he had previously been the director of CBW Utility Services, which went into liquidation in 2010, and had not mentioned the transfer of a vehicle from Groundworks & Utility Services to Groundwork Utility Structures in January 2016, as required on the application form.
When replying to a letter that asked why the Brierley Hill, West Midlands-based company had not informed the OTC of the impending liquidation, contracts manager Nathan Freeman claimed he and his staff were unaware of any recent change to the status of Groundworks & Utility Services and had no involvement with that company.
However, Freeman indicated that Groundworks & Utility Services had entered liquidation as a result of pursuing legal action against its former managers. A number of employees left the firm in early 2015, taking customers with them.
The new business was formed in June 2015, about the time that the former business started to be affected by staff issues.
Welch told the PI that he had read “some of” the application form before signing it.
He claimed he had not known about the impending liquidation at the time the application was made, but a creditors’ report showed he first consulted the liquidators on 21 July 2016 – seven days before it was made.
When it emerged that Welch spent most of his time in Spain, the TC said he was concerned that the sole director was absent for extended periods of time and was therefore unable to ensure that the O-licence undertakings were being fulfilled.
Denton said the change of the former company’s trading name from ‘Groundworks & Utility Services’ to ‘Groundwork Utility Services’ in June 2016 was evidence that there was “a close link between the two companies and that the intention was that there be a seamless transition from one to the other”.
He added that Welch had “undermined the necessary trust right from the beginning”.
