Scotland’s traffic commissioner (TC) Joan Aitken has refused an O-licence after discovering that the company’s directors had taken steps to distance themselves from financial difficulties.
Akram Mazhari, director at Aberdeen-based KPD (UK) Delivery, and former director Kamyar Shokat Sadri, had not told the TC that financial difficulties arising from late payment of VAT had led to a previous company going into liquidation.
A public inquiry (PI) in October was told that the name of the former business had been changed from KPD (Aberdeen) to Aberdeen Delivery Service ahead of the liquidation in April in order to protect the reputation of the KPD name.
Mazhari told the PI that applicant company KPD (UK) Delivery was established in 2013 to get new contracts because KPD (Aberdeen) generated more business. It did not operate until November last year, and used small vans until it applied for an O-licence to run two trucks in April.
When KPD (Aberdeen) began to experience financial problems, it was advised by an insolvency practitioner to change its name. It did not tell the TC about this until the PI.
Mazhari claimed KPD (Aberdeen)’s problems with HMRC arose from mistakes made by former accountants who did not submit VAT returns on time and incurred surcharges.
The operator was given three months to settle its bill, but Sadri said this had been physically impossible. It had not tried to seek an extension from HMRC.
Mazhari had not declared on the O-licence application form a conviction for speeding in a car. She also claimed that she did not know about the financial problems experienced by the sister company when the application was made.
In her written decision last month, Aitken said Mazhari and Sadri had attempted to distance themselves from the financial difficulties by changing the company name and omitting it from the O-licence application.
The Office of the Traffic Commissioner had also written to KPD (UK) Delivery asking if financial difficulty was the reason behind the application, which Mazhari denied.
The TC said that until the PI she had not been aware that Mazhari and Sadri were spouses.
She said: “It had been known for some time that their KPD company had been in trouble. It was in such trouble that a name change was effected to distance itself should likely insolvency proceedings arise. I note that the action brought by HMRC was indeed against the company in its changed name.”
Aitken said the directors were not naive and took “active steps to extend opportunities for more contracts [and] who changed a company name to avoid association with liquidation”.
“In this application they made the gross error of judgement by the applicant director of attempting a deceit of the Office of the Traffic Commissioner. Such a deceit not only offends the trust that must exist between traffic commissioner and operator, but offends against fair competition.”
