The director of a company which managed investments into Snoozebox Holdings has been banned from running a company for 11 years for gifting close to £4m worth of investments while he was an undischarged bankrupt.
Neil Leslie Burns, 57, from Windsor, Berkshire did not attend the High Court in London on 10 February, where Judge Burton handed him the directorship disqualification in his absence.
The court heard that Burns was a director of an investment company, B52 Investments. Incorporated in November 2010, the company was charged with holding and managing investments into Snoozebox Holdings, a pop-up hotel company which used recycled shipping containers.
B52 Investments held 6.1 million shares in Snoozebox Holdings and received at least £3.3m worth of loans and investments from investors, as well as £1.7m worth of bank receipts into the company’s accounts.
But the directors of B52 Investments abandoned the company after transferring all B52 Investment’s shares in Snoozebox Holdings to connected third parties, resulting in the company’s liquidation.
B52 Investment’s liquidation then brought the company to the attention of the Insolvency Service after the directors failed to co-operate with the liquidator or deliver up books and records.
During enquiries, B52 Investment’s directors were unable to satisfactorily explain £3.9m worth of transactions and the transfer of the 6.1 million shares the company held in Snoozebox Holdings.
Following further enquiries, investigators discovered that Burns had been bankrupt three times, the latest coming in 2013 and had not been discharged from his restriction. As a bankrupt, he was banned from managing companies.
Not only did he remain managing B52 Investments, he entered into agreements with investors while transferring their funds to connected third parties and family members.
Further misconduct saw him transfer all the shares B52 Investments held in Snoozebox Holdings to connected third parties. This was despite 1.4 million worth of shares already being used to secure investment of £373,000.
Burns also agreed deals with third parties for investments earmarked to purchase vehicles for re-sale. The £253,000 worth of investments, however, were transferred to connected parties and family members but, due to the lack of books and records, the directors could not explain why this happened.
The lack of books and records also meant that Burns could not fully explain £5m of receipts and what had happened to £3.9m of payments.
Effective from 3 March 2020, Neil Burns is banned from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
Mark Bruce, chief investigator for the Insolvency Service, said: “Throughout our enquiries Neil Burns obstructed our investigations to ensure we wouldn’t be able to discover what he had done. Fortunately, our investigators were able to find evidence that showed not only was he an undischarged bankrupt but that Neil Burns had used investors’ funds for his own personal benefit and those he was closely acquainted with.
“An 11-year disqualification is a significant ban and should serve as a warning to other directors that failing to deliver up the company records will not stop the Insolvency Service carrying out a full and thorough investigation and discovering serious misconduct.”