Two directors of a collapsed Swindon furniture company have been disqualified for five years for accepting customer deposits worth tens of thousands of pounds despite the business being insolvent.
The action against Kevin Grey and Paul Collins of Manor Furniture (Swindon) follows an investigation by the Insolvency Service.
The pair were found to have put customers’ funds at unreasonable risk by accepting down payments even though there was little chance of customers getting their goods. The directors continued to take deposits after an insolvency practitioner warned them to stop and following their failure to bring new investment into the company to keep it in business.
The Insolvency Service found that between September and November 2012 Mr Grey took deposits from Manor customers worth £59,735 while Mr Collins took £40,614 between September to October 2012.
The pair had met an insolvency practitioner on August 14, 2012 who advised them that without a cash injection he could not see how Manor Furniture could continue to trade.
A potential investor promised to put money into Manor Furniture but by September 11 Mr Collins was expressing clear doubts whether this would go ahead. The company deemed to be insolvent the following day and went into administration on November 21, 2012.
The firm, based on Swindon’s Cheney Manor industry estate, was launched in November 1998 and Mr Grey and Mr Collins were appointed directors in September 2010.
Chief investigator at the Insolvency Service, Sue Macleod, said: “This is a case in which the directors clearly accepted deposits from customers at a time when the company was insolvent and not in a position to fulfil those orders.
“There is no place in the business community for such behaviour and such actions are likely to lead to investigation by the Insolvency Service and result in censure.”
Mr Grey and Mr Collins have given undertakings to the Secretary of State for Business, Innovation & Skill, which prevents them from becoming directly or indirectly involved in the promotion, formation or management of a company for five years from August 1, 2014, and July 30, 2014 respectively.