The director of a telecom carrier service provider has been sentenced to four months in prison and fined £5,000 for failing to keep proper company accounts.
Karan Singh, director of Cypher 7 Limited, was convicted at Blackfriars Crown Court and handed a 12-month suspended sentence.
Ian West, deputy chief investigation officer at the Department of Business, Innovation and Skills, said: “Company directors should not that it is a criminal offence to fail to keep and preserve adequate accounting records.
“They should be in no doubt that the Department for Business will prosecute those that choose to ignore this warning.”
An investigation by The Insolvency Service and a full criminal investigation by the Department for Business Innovation and Skills found Singh had failed to keep proper accounting books for Cypher 7 between 15 October 2003 and 24 October 2008.
Singh was also disqualified from acting as a company director or in the promotion, formation or management of a company for four years from 14 June 2013.
Cypher 7 entered administration in 2008 and joint administrators from Vantis Business Recovery were appointed.
Administrators found in the 12 months prior to administration, £410,322 had been paid to a second registered director, after he had resigned from the company.
Missing from the records were cash books, sales ledger, purchase ledger and fixed assets register used by the company.
As a result, administrators were unable to determine the reason for the payments to the resigned director, cash withdrawals totalling £356,825, and the reason for the company’s liquidation.