Two Directors and a Company Secretary have been jailed for contempt of court relating to a £7.7m VAT fraud, following an investigation by HM Revenue and Customs (HMRC).
A court order appointing a Provisional Liquidator was made by the High Court in March 2014 against Parkwell Investments Ltd, based in Wilmslow, Cheshire. The order removed the company’s officers and appointed a Provisional Liquidator in their place to protect the company’s remaining assets.
The company’s officers then deliberately and knowingly acted in contempt of court by transferring £450,000 out of the reach of the Provisional Liquidator.
The funds are now very unlikely to be recovered, a point which presiding Judge Mr Justice Norris took into consideration when sentencing. He said the company officers’ actions “were an affront to the rule of law and order”.
Amran Munir, Ali Sami Farooq, and Saif Chaudhry were each sentenced to six months’ imprisonment, of which three months is to be served in prison before being granted unconditional release. Unusually, the prison sentence was given in civil, rather than criminal, proceedings.
The individuals initially defended their actions but at the eleventh hour admitted to knowing breaches of the court’s order.
Mr Justice Norris said:
Where company officers seek to thwart a liquidator, a message must be sent to the business community.
Andy Cole CBE, Specialist Investigations Director, HM Revenue and Customs (HMRC), said:
Committing contempt of court to get out of paying your VAT debts just adds insult to injury. We will relentlessly pursue those behind this type of abuse using all the means at our disposal.