On 12 Feb. 2015, the director of the insolvent company St. Vincent Street (SVS) Ltd., Thomas Coakley (age 54), signed a 7-year disqualification undertaking, which banned him from acting as a company director of any limited company until Feb. 2022.
A month earlier, on Jan. 14 2015, his son Ronald Andrew Coakley (age 28) also signed a shorter 3-and-a-half year disqualification undertaking, which banned him from acting as a director of any limited company until July 2018.
SVS entered into administration on 14 Feb 2013 after trading between the months of April 2010 to February 2013. The company was originally incorporated on 2 Nov. 2009. At the time of entering into administration, SVS had a total of £21,741,506 in liabilities and possessed a total of £9,126,015 in assets, the difference between which resulted in estimated deficiency of £12,615,491 owed to creditors.
Falsified Employment Records
SVS was a property company that failed to fulfil the legal obligation to protect the deposits of tenants. Furthermore, it was found that the company paid staff in gross while stating otherwise on their employment contracts. In particular, an investigation conducted by the Insolvency Service revealed that SVS did not accurately and properly account for tax through the time it was trading.
An examination of the company’s employment contracts showed that SVS should have been paying employee tax according to the PAYE system, but only one of their employees was registered in the scheme. An audit of the company’s accounts showed that employees were paid in excess of £500,000 overall. Meanwhile, all deductions, declarations, and PAYE/NIC payments to HMRC totalled less than £10,000. In addition, while the directors of SVS operated directors’ loan accounts, they failed to account the corporation tax to HMRC.
Failure to Account for Tenant Deposits
The sum of the tenant deposits that SVS failed to protect totalled to £19,425, an although the company could not preserve these deposits, before ceasing to trade SVS cleared out its bank account of all funds by making payments totalling more than £26,000 to a family member.
Insolvency Service Speaks Out
Cheryl Lambert, the Head of Outsourced Investigations at The Insolvency Service, commented on the disqualification of the directors of SVS, stating that the Insolvency Service will continue to “protect the integrity of the marketplace” in situations where the directors of property companies fail to comply with their obligations protect tenant deposits and properly pay tax. In such cases, Cheryl says, directors who breach fiduciary duties “can expect the Insolvency Service to seek a ban.”
Cheryl concluded her comments saying that Thomas Coakley operated the business like it was “a personal fiefdom” and continuously put his own interests before that of his company’s creditors and tenants, as well as the common taxpayer.
Thomas Coakley’s signed undertaking was given to the Secretary of State for Business Innovation & Skills in February; his disqualification commenced on 5 Mar. 2015. His son, Ronald Coakley, gave his signed undertaking in January, but his disqualification is set to commence on 2 Apr. 2015.