Disqualification of Company Directors and Officials | Invoice Discounting Fraud


In his article posted on September 13th 2016, Timothy Thompson of Kangs Solicitors examined the issue of company director disqualification.

The article referred to the situation where, in the event of a compulsory liquidation of a company, suspected improper conduct by any individual will be investigated by the Official Receiver, whether or not that person is registered formally as a director at Companies House.

Colin Parker of Kangs Solicitors shows that this explanation is highlighted by recent company director disqualifications arising from an invoice discounting fraud.

I am not a Director so can I be Disqualified? | Director Disqualification Solicitors

In a recent case, Raj Kumar Thaneja and his daughter, Ellena Jane Kehoe have been disqualified from holding the position of company director for a total of sixteen years for raising false invoices.

Whilst not formally appointed as a director of Kingsway Lansdown Limited, Raj Kumar Thaneja did not dispute that he acted as the company’s director at a time when his daughter was registered in that official position.

False invoices were raised, which were not in accordance with the company’s agreement with its invoice factoring provider, resulting in the company receiving money to which it was not entitled.

Susan MacLeod, chief investigator with the Insolvency Service said:

 ‘The directors failed to live up to the expectations of the business community’.

What is Invoice Discounting Fraud? | Solicitors Defending Fraud Cases

Invoice discounting is a totally proper and regularly used form of cash flow financing for, on the whole, smaller businesses.

Invoice discounting operates where a company or individual(s) (‘the trader’) has rendered a legitimate service or provided goods to a customer and then, in the normal course of events, issues the appropriate invoice seeking the due and agreed payment for the service or supply of the goods.

If the trader needs cash flow ahead of receipt of payment from the customer, then, under such a discounting arrangement, the invoice is assigned to the lender in return for payment of an agreed percentage of the rendered invoice.

Upon payment by the customer of the amount of the invoice, the lender will deduct its lending costs and the balance will be paid to the trader.

However, the system is open to abuse, as seen above, where the trader produces invoices for services not provided or for goods not delivered, then assigns them to the invoice factoring company and receives cash to which it is not entitled.

How can we help? | Criminal and Fraud Defence Solicitors

The team of fraud solicitors at Kangs Solicitors is highly experienced with assisting clients who are being investigated or prosecuted for financial fraud of all description, whether personally or through involvement with a company.

Seeking specialist advice at a very early stage is imperative to enable your interests and rights to be considered and explained to you as appropriate.

Who can I contact for help? | Kangs Solicitors

We welcome clients contacting us and we will provide an initial free consultation to discuss your matter with you and advise you how we can help with your case.

Our team of lawyers is here to help you and the contact details are as follows:

Hamraj Kang
07976 258 171 | 020 7936 6396 | 0121 449 9888

Tim Thompson
0121 449 9888 | 020 7936 6396 | 07989 521210

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