Father and daughter directors of Kingsway Lansdown Limited have been disqualified for total of 16 years for raising false invoices.
Mr Thaneja caused Kingsway Lansdown Limited to raise false invoices to an invoice discounting facility provider (a bank), which enabled the company to receive at least £190,630 to which it was not entitled. Ms Kehoe failed to prevent the company from raising the false invoices.
The shortfall currently owed to the bank on the facility is £394,078. The company raised at least 26 invoices that were fictitious between 17 December 2013 and 1 May 2014, with a total value of £238,287. This caused the bank to release £190,630 to the company.
Both Raj Thaneja and his daughter Ellena Jane Kehoe, entered into disqualification undertakings which prevents them from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.
On 17 June 2016, the Secretary of State accepted a Disqualification Undertaking from Raj Thaneja, from 8 July 2016, for 11 years.
On 25 April 2016 the Secretary of State accepted a Disqualification Undertaking from Ellena Jane Kehoe, effective from 16 May 2016, for a period of 5 years.
Kingsway Lansdown Ltd was based in Bradford-on-Avon, Wiltshire and was a retail and wholesaler of electrical goods. The bank appointed an Administrator on 24 June 2014, and the company had total assets of £515,447 and total debts of £1,383,694.
Commenting on the disqualification, Susan MacLeod, Chief Investigator at the Insolvency Service, said:
"The directors did not run their business in accordance with the terms set out in its agreement with the invoice discount facility provider. The company obtained money to which it was not entitled by submitting details of sales invoices which did not exist, which caused the provider to incur financial losses. The directors failed to live up to the expectations of the business community.
"Company Directors should note that the Insolvency Service will take action to protect the public where directors have been found to take reckless risks with creditors’ money. They should also note the breadth of misconduct which can be considered for proceedings under The Company Directors’ Disqualification Act 1986."
Notes to editors
Kingsway Lansdown Ltd (CRO No. 05196416) was incorporated on 3 August 2004 and latterly traded from Units 17 & 18 Treenwood Industrial Estate, Bradford-on-Avon, Wiltshire BA15 2AU. The company was a wholesaler and retail sale of electrical goods. An Administrator was appointed on 24 June 2014 by the Company’s bank, with an estimated deficiency as regards creditors of £868,247.
An invoice discounting facility allows funding up to a percentage of the value of invoices raised to be drawn down immediately, and the remainder (less fees) upon collection of the debt.
Raj Thaneja’s date of birth is 7 December 1958 and he now resides in Mallorca, Spain. He was not formally appointed as a director of the company, however he did not dispute that he acted as the company’s director.
Ellena Jane Kehoe’s date of birth is 26 October 1980 and she resides in Selby, Yorkshire. She was a director of the company between 6 August 2004 and its insolvency on 24 June 2014.
Mr Thaneha is Ms Kehoe’s father.
The matters of unfitness, which Mr Thaneja did not dispute in the Disqualification Undertaking, were that:
"Between at least 17 December 2013 and 01 May 2014, I caused Kingsway Lansdown Limited to raise false invoices to a bank with which it operated an invoice discounting facility in order to obtain access to monies to which it was not entitled totalling at least £190,630 and I failed to ensure that Kingsway Lansdown Limited operated the invoice discounting facility appropriately within the terms of that agreement."
On 25 April 2016 the Secretary of State accepted a Disqualification Undertaking from Ellena Jane Kehoe, effective from 16 May 2016, for a period of 5 years. The matters of unfitness, which Ellena Jane Kehoe did not dispute in the Disqualification Undertaking, were that:
"Between at least 17 December 2013 and 01 May 2014, I allowed Kingsway Lansdown Limited to raise false invoices to a bank with which it operated an invoice discounting facility in order to obtain access to monies to which it was not entitled totalling at least £190,630 and I failed to ensure that Kingsway Lansdown Limited operated the invoice discounting facility appropriately within the terms of that agreement."
Solicitors acting for the Administrators and the bank reached a settlement with Mr Thaneja, which provided for a payment of £50,000 to be made to the bank and £45,000 to be made to the Administrators.
Mr Thaneja was made bankrupt on 18 August 1993 on his own petition, and was made bankrupt a second time on 25 November 2014 on the petition of a creditor.
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
- act as a director of a company
- take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
- be a receiver of a company’s property
In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Further information on director disqualifications and restrictions can be found here.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
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Source: Gov.uk (Contains public sector information licensed under the Open Government Licence v3.0.)