A Manchester-based director of a groundworks and civil engineering company has been disqualified for six years for failing to keep adequate records and for transactions that were for his own benefit but detrimental to creditors.
Daniel Teahan gave an undertaking to the secretary of State for Business Innovation & Skills not to manage, control or be a director of a company until 2018 following an investigation by the Insolvency Service's company investigation team in Manchester.
DCT Building & Civils Limited was placed into liquidation on 16 February 2010, with an estimated deficiency to creditors of £506,507.
Teahan did not dispute that:
- He failed to ensure that the company maintained or preserved adequate accounting records. As a result it was not possible to verify the company's VAT and CIS tax returns were correct and that cash drawings totalling £188,100 had been paid to suppliers as claimed. Furthermore it was not possible to verify why the company paid £101,990 more than invoiced by a supplier, of which £55,560 was paid in cash after the supplier had gone into liquidation and was not paid over to the supplier's liquidator.
- He caused the company to enter transactions that were to his benefit and to the detriment of creditors. Between 4 December 2009 and 16 February 2010, the date of liquidation, Teahan drew £49,220 from the company and cleared the company's overdraft by selling assets, thus releasing himself from his personal guarantee to the company's bank.
Claire Entwistle, director of company investigations North at the Insolvency Service, said: "Directors who seek to benefit themselves ahead of creditors in insolvent companies will be pursued rigorously by the Insolvency Service. An aggravating feature in this case was the company's failure to keep full records in respect of its tax position, such that it was not possible to verify whether the company had paid all the tax that it should have."