A Kent accountant and director of a construction firm has been banned from directing for 12 years for defrauding the company’s creditors.
Alan James Proto was awarded the title Entrepreneur of the Year in 2012 and in the following year was creating false documentation for his company to cover up a transfer of £1 million worth of assets, all the while knowing it was insolvent.
GML Construction Limited traded between 1991 and 2012 and entered administration in November 2013. Not long afterwards, the company went into liquidation, owing £4,463,599 to creditors.
Proto knew the company would be entering a formal insolvency procedure and deliberately moved money and assets to avoid any of it reaching creditors. What’s more, Proto made sure his own loan to the company was paid back to him before any other creditors – this is known as a preference.
The Insolvency Service revealed Proto was caught out when documents (detailing his plans to defraud) were recovered from a computer after the file had been deleted.
The department commented “This is a very significant ban, reflecting the severity with which the Insolvency Service considers director conduct.”
If a company becomes insolvent, it is always the director’s duty to maximise the creditor’s best interests. Hiding information and covering up transfers at the creditor’s expense will result in a thorough investigation and disqualification.