Pubco directors banned for failing to keep adequate books

Shaun Fountain, 60, and Deborah Fountain, 37, of Fountain’s Choice Ltd, have been banned from being the directors of any limited company for eight years.

The Government’s Insolvency Service stated that the lack of records means it’s impossible to accurately explain why net funds of £689,300 were transferred to a related company, net funds of £14,979 were transferred to another related company and £15,214 was transferred to an unidentified bank account.

It has also not been possible to determine the nature and amount of the directors’ remuneration and whether payments were taxed properly, according to the service.

'Cloak for impropriety'

Robert Clarke, head of company investigation at the Insolvency Service, said: “Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency.

“Without a full account of transactions it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.”

The Service explained since liquidation it’s also been impossible to explain the causes of the pubco’s failure or accurately detail the acquisition and disposal of its assets or its financial position at any point in its trading life.

Unclear purpose

Therefore, the purpose is also unclear for cheque payments and cash withdrawals totalling £18,744, transactions debiting the company’s bank account totalling £58,740 and payments totalling £39,527 debited the company’s bank account to purchase fixtures, fittings and franchise fees for public houses which were in the sole names of the Fountains.

Fountain’s Choice Ltd managed pubs solely owned by Shaun Fountain in Bradford and Leeds, including The Regent Hotel on Kirkgate, the Three Legs on the Headrow, The Three Horshoes on Otley Road, and Tommy Wass on Dewsbury Road, until it entered into liquidation on 18 November 2013.

On 18 February 2016 the Secretary of State accepted Disqualification Undertakings from Shaun and Deborah Fountain effective from 10 March 2016 for a period of 8 years. The matters of unfitness, which the Fountains did not dispute, were that:

“I failed to ensure that Fountain’s Choice Limited (Fountains) maintained and/or preserved, or in the alternative, I failed to deliver up adequate accounting records for the period from incorporation on 10 February 2012 until entering liquidation on 18 November 2013.”

Disqualification

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

• act as a director of a company
• take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
• be a receiver of a company’s property