The Insolvency Service has acted against three brothers who it said concealed restaurant earnings and left the taxpayer more than £500,000 out of pocket.
The government body said it had banned Abul Azad (57), Abul Ashraf (50), and Abul Khaled (44) from acting as company directors for seven years, seven years, and three-and-a-half years respectively.
It said the three, all from Melton Mowbray in Leicestershire, had been directors of A & A (Melton Mowbray) Limited.
They had shared the running of three Indian restaurants, it said – the Apurba, in Leicester Road, Melton, the Bombay Brasserie, in London Road, Grantham, and another called the Tandoori Knights, in Burton Street, Melton.
It said they had avoided paying the full VAT and corporation taxes that were due by “deliberately or recklessly” destroying or removing sales records in their company accounts.
In total, it said, some £566,749 was owed to HMRC when the brothers put the business into voluntary liquidation almost three years ago.
It said: “Throughout the Insolvency Service investigation, the brothers sought to discredit and place blame on the company’s accountant, despite receiving written warnings from the accountant in successive years that the company had inadequate record keeping processes in place and that it was obvious that cash and sales records were going missing.
“In some cases, sales identified solely through card payment data was found to be more than their total reported sales, which also included cash payments.”
The Insolvency Service said Abul Azad and Abul Ashraf signed disqualification undertakings accepting that they caused or allowed the company to suppress its sales over a period of at least four-and-a-half years, to the detriment of HMRC.
Their bans began on July 6, 2021 and last for seven years.
It said Abul Khaled, who was only a director of the company for a short time during the period, admitted to causing or allowing the company to suppress its sales over a period of at least eight months.
His ban of three-and-a-half years also begins on July 6.
Cassandra Dowthwaite, deputy head of insolvent investigations (north) at the Insolvency Service, said: “This ban should serve as a warning to other directors tempted to conceal sales and withhold taxes, which are needed to fund vital public services, for their own benefit.
“Companies have limited liability, which is a privilege, not a right, and The Insolvency Service have strong enforcement powers which we will not hesitate to use to remove that privilege from dishonest or reckless directors.
The Insolvency Service said Azad and Ashraf were the longest serving directors, having been in post since the company was incorporated on May 6, 2010.
Abul Khaled was in office from November 1, 2015 to July 1, 2017.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
