From 15 July 2020, Roy Davies (55) from Rochdale, Lancashire, is banned for six years 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.
LTG Recruitment Limited was incorporated in April 2015 and Roy Davies, formerly of Frodsham, Cheshire, was appointed a director at the same time.
Roy Davies used the 'EMS' brand name extensively across various recruitment companies, including LTG Recruitment, but only a year after incorporation, LTG Recruitment entered into liquidation in October 2016 and this brought the company to the attention of the Insolvency Service.
Investigators established that between August 2015 and September 2016, LTG Recruitment incurred liabilities owed to the tax authorities. Roy Davies, however, caused the company to loan himself more than £114,000, while also paying more than £38,000 to an associated company.
At the point of liquidation, LTG Recruitment owed more than £289,000 to the tax authorities, while four other recruitment companies that Roy Davies was also a director of and went into liquidation in February 2016, also owed close to £700,000 to the tax authorities.
Roy Davies also borrowed money from some of the connected companies and owed nearly £300,000 net when they entered in liquidation.
Further enquiries uncovered that prior to LTG Recruitment entering into liquidation, Roy Davies caused the company to seek advice from an insolvency practitioner in September 2016 about the future options for the company.
On the same day, however, Roy Davies caused the company to award himself a salary bonus of more than £152,000. After tax, which LTG Recruitment did not pay, Mr Davies' bonus was £82,000 and this was used to reduce the amount of money he owed to LTG Recruitment.
And of the payments made to the associated company, £14,000 worth was paid after instructions had been given to liquidate the company.
On 24 June 2020, the Secretary of State accepted a disqualification undertaking from Roy Davies after he did not dispute that he caused LTG Recruitment to trade at the risk, and to the ultimate detriment of, the tax authorities, and enter into transactions which were to the detriment of the company's creditors.
Rob Clarke, Chief Investigator for The Insolvency Service, said:
It is bad enough that Roy Davies received substantial payments from LTG Recruitment, leaving the company unable to pay its creditors when the company collapsed. But knowing from the previous failures that he would be pursued for repayment of his loan account, he also took steps to ensure that he would not be required to repay the money he had received when LTG Recruitment went into liquidation.
This ban should serve as a warning to other directors tempted to put themselves first, you have a duty to your creditors and if you neglect this duty you could be disqualified and lose the privilege of limited liability trading.
Noted to editors
Roy Davies is from Rochdale, Lancashire (formerly Frodsham, Cheshire), and his date of birth is October 1964.
LTG Recruitment Limited (Company number 09557261)
Previous company names for LTG Recruitment:
From 23 April 2015 to 19 January 2016 the company name was EMS Omega Executive Search Limited.
From 19 January 2016 to 26 August 2016 the company name was EMS Recruitment Group (Services) Limited.
Connected companies
The four companies which went into CVL on 24 February 2016:
- RICECo Limited (Formerly EMS Omega Limited and Recruitment Industry Consortium Enterprise Limited) (Company Number: 06515671).
- EMS Argo Limited (Formerly EMS Interim Limited, EMS Omega Limited and EMS Sigma Holdings Limited) (Company Number: 08338739).
- INTERIMEMSCO Limited (Formerly EMS Sigma Limited and EMS Recruitment Selection Limited) (Company Number: 03744141).
- D.A.S. Developments Limited (Company Number: 07269789).
The 'associated company' which received payments of £38,724 (and which subsequently went into CVL on 14 December 2017):
- 8D Automotive Executive Search Limited (formerly EMS Delta Limited, EMS Recruitment Group (International) Limited and Blue Jay Recruitment Limited (Company Number: 09636951).
About disqualifications
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Persons subject to a disqualification order are bound by a range of restrictions.
