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Directors securing funds against the assets their company legitimately owns is a perfectly acceptable practice but…

Overview: Motor Parts Suppliers Disqualified As Director After Illegitimately Securing £176,000

Peterborough-based mechanics and motor parts suppliers banned for a total of 25 years after the pair provided false documents to secure £176,000 worth of loans.

Adam Hughes (43) received a 13-year disqualification order in the High Court before Judge Barber on 20 July 2021. His business partner, Andrew Wood (49), had signed a 12-year disqualification undertaking a year earlier on 2 September 2020.

The court heard that Adam Hughes and Andrew Wood were directors of Concorde Tyre & Exhaust Centres Ltd. The company was incorporated in 2011 and sold motor parts, as well as providing repair services.

Between 2011 and 2017, Concorde Tyre & Exhaust Centres expanded rapidly, operating 9 sites across Central and Eastern England, covering, Coventry, Northampton, Milton Keynes, Oxford, Leicester, Peterborough, Wisbech, Cambridge and Norwich.

But this growth led to cash flow problems and Administrators were appointed to undertake a pre-packaged sale of the business.

Following their appointment, however, the Administrators discovered a third party had petitioned the court to wind-up Concorde Tyre & Exhaust Centres. The Administrators also had difficulties establishing who owned the company’s assets and who had secured loans against them.

The directors’ conduct was referred to the Insolvency Service where investigators uncovered that Adam Hughes provided false documents, including invoices, emails and bank statements, to secure more than £176,000 from an asset finance company.

Further enquiries also established that on at least three separate occasions, Adam Hughes supplied false documents to secure finance against assets Concorde did not own.

Andrew Wood knew that Concorde Tyre & Exhaust Centres did not own the assets but allowed his business partner to secure finance under false pretences.

The court heard that Andrew Wood voluntary signed his 12-year disqualification a year earlier, while Adam Hughes did not engage with the Insolvency Service and this was noted by Judge Barber, who described Adam Hughes as having a ‘flippant attitude’ towards proceedings.

Andrew Wood’s ban was effective from 23 September 2020, while Adam Hughes’ 13-year Disqualification Order is effective from 10 August 2021.

The pair cannot, directly or indirectly, become involved, without the permission of the court, in the promotion, formation or management of a company.

Mark Bruce, Chief Investigator for the Insolvency Service, said:

Directors securing funds against the assets their company legitimately owns is a perfectly acceptable practice. Adam Hughes, however, failed to act honestly while securing more than £176,000 and Andy Wood failed in his diligence.

25 years’ worth of bans is a substantial amount of time to be removed from the corporate arena and their disqualifications should serve as a warning to other directors tempted to defraud creditors by falsifying documents.

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Disclaimer: Motor Parts Suppliers Disqualified As Director After Illegitimately Securing £176,000

This page: Motor Parts Suppliers Disqualified As Director After Illegitimately Securing £176,000 is not legal advice and should not be relied upon as such. This article Motor Parts Suppliers Disqualified As Director After Illegitimately Securing £176,000 is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

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Elliot Green

Licensed Insolvency Practitioner & Chartered Accountant. We Know Insolvency Inside Out.