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Chester director disqualified for 11 years for issuing false invoices

10 July 2012 14:00

Insolvency Service

Simon Wilson Grimes from Chester, who ran a Wrexham garden products wholesaler has been disqualified from acting as a company director for 11 years, following an investigation by The Insolvency Service’s Company Investigations Team in Manchester.

Mr Grimes, 54, of Belle Vue Lane, Guilden Sutton, Chester, was the director of West Meters Limited, based near Wrexham, North Wales, which went into liquidation on 28 August 2010. He has given an undertaking barring him from acting as a company director, and from managing or in any way controlling a company. The ban will last until 25 July 2023.

The company supplied home and garden clocks, thermometers and ornaments to local and national home and garden retailers. It used a finance company for up front payment of its sales invoices, to improve its cash flow before customers had paid for goods supplied.

The investigation revealed that the company had invented invoices for non-existent sales, and had then received funding from the finance company for these false invoices. The Insolvency Service calculated that the company received at least £444,000 against false invoices.

By the time the company went into liquidation it had run up debts of £1,089,676 and had assets of only £9,520.

In signing the undertaking, Mr Grimes did not dispute that:

· He was responsible for West Meters Limited raising false sales invoices between January 2009 at the latest and 27 May 2010

· That practice was a breach of the company’s agreement with its finance company ;

· The total sum known to have been paid to West Meters by its finance company against false invoices, and outstanding at 10 June 2010, was at least £444,212

Claire Entwistle, Director of Company Investigations North at The Insolvency Service, commented:

“The Insolvency Service deals robustly with directors who unfairly gain advantage over competitors and harm their creditors, by using unacceptable financial practices.

The protection of limited liability is available to those who comply with their obligations as company directors. If those obligations are ignored, the protection will be withdrawn, as Mr Grimes has found to his cost.”

Ends

Notes to Editors

1. West Meters Limited was incorporated on 11 August 1978 and went into liquidation on 28 August 2010.

2. Simon Wilson Grimes was the only director of the company between 1 February 2005 and liquidation.

3. Invoice financing (sometimes referred to as factoring) is a routine commercial practice, whereby a trader notifies its sales invoices to a finance company, which:

  • advances to the trader a percentage of the value of sales invoices notified
  • collects payment for the invoices directly from the trader’s customers, or indirectly via the trader (according to the type of invoice financing agreement)
  • then pays the trader the remaining balance, less its own charges

4. Disqualification undertakings have the same effect as disqualification orders made by a court, and are therefore legally binding. Without obtaining permission from a court, a disqualified person may not:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company
  • be a liquidator or administrator of a company
  • be a receiver or manager of a company’s property

Further information on director disqualifications and restrictions can be found on The Insolvency Service’s website, here.

5. The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver, to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency.

6. Media enquiries should be directed to:

Kathryn Montague, Media Relations Manager, Telephone 020 7674 6910 or Ade Daramy, Press Officer on 020 7596 6187

Ins12/coms/060

Contact Information

Ade Daramy
Name
Ade Daramy
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Mr
Division
Insolvency Service
Phone
020 7596 6187
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Mobile
Email
ade.daramy@insolvency.gsi.gov.uk