Waste director disqualified for bad bookkeeping after insolvency

A waste director has been disqualified for failing to ensure that his company maintained its books and records.

Paul Cosgrove was the Director of TBP & Son Ltd, a waste management services company based in Leicester, until it went into liquidation in February 2015, owing over £1.7 million to creditors, including £686,000 to HM Revenue & Customs.

However, The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS) to administer the insolvency regime, found that Cosgrove had failed to maintain, preserve or deliver the books and records of the company.

This meant that it was not possible to determine why the company had accrued expenditure totalling £4.2 million to a third party, and therefore whether it was legitimate; what happened to over £5-million of assets; and what level of VAT was due to HMRC.

Purchase invoices show that between 26 October 2013 and 2 December 2014, TBP purchased scrap metals for the sum of £5,004,477 against corresponding sales invoices in the sum of £2,133,430, resulting in scrap metal with an invoice value of £2,871,047 being unaccounted for. Similar invoices for waste paper and plastics show a value of £2,371,798 being unaccounted for.

“Failure to deliver up the books and records of a company to the Liquidator which results in a loss to creditors and the public purse will be rigorously investigated by the Insolvency Service in liaison with HM Revenue & Customs,” said Martin Gitner, Deputy Head of Investigations with the Insolvency Service. “Even where the director chooses not to engage with the investigation process, disqualification as a director is the likely outcome of such activity.”

Effective from 24 October, Cosgrove has had a disqualification order made against him by BEIS, preventing him from becoming directly or indirectly involved in the formation or management of a company for eight years.