Ban for directors of Congleton telecoms firm

Three former directors of a Congleton-based telecoms company, have been banned from being company directors for over 30 years.

The disqualification of James Elphinstone Reed ,45,  of Tarporley, Neil Arthur Pursell, 51, of Stoke-on-Trent and  Adrian John Sumnall, 45 of Market Drayton, Shropshire, relates to their conduct as directors of Ace Telecom Trading Limited – which folded owing creditors more than £30m

An investigation by the Insolvency Service found the company was involved in deals traced back to fraudulent tax losses of over £13m.

The trio have all made disqualification undertakings to the Secretary of State for Business, Innovation and Skills (BIS) not to promote, manage, or be a director of a limited company until 2026.

The undertakings given by Mr Pursell and Mr Sumnall followed court proceedings commenced by the Official Receiver.

ATT, which was registered to an address  in Coventry but had its main trading operation Lawton Street, Congleton, was a wholesaler of mobile telephones and other electronic goods. It was wound-up by the Court in July 2013 owing more than £18m to HM Revenue and Customs (HMRC) and with an estimated total deficiency to creditors of £32m.

In giving the undertakings, Pursell, Sumnall and Reed did not dispute that they caused or allowed ATT to participate in transactions which were connected to the fraudulent evasion of VAT, which they either knew or should have known about, and that ATT wrongfully claimed VAT from HMRC totalling almost £14m.

Pursell and Sumnall were also directors of Newcastle-under-Lyme-based Winnington Networks which was placed in to provisional liquidation on the application of HMRC in March 2014. The Court was satisfied that Winnington was involved in fictitious trading connected to a complex VAT fraud. The business was subsequently wound up with tax debts of approximately £6m.

Ken Beasley, Official Receiver at the Insolvency Service’s public interest unit, said: “The directors of Ace Telecom Trading Limited were well aware of the risks of VAT fraud but nonetheless the company entered into transactions linked to the fraudulent evasion of VAT and wrongfully reclaimed VAT input tax of almost £14m.

“VAT fraud represents a pernicious attack on the public finances and the periods of disqualification reflect the serious view taken of the conduct of the directors in this case.”