Cold calling director struck off for ‘flagrant’ breach of duties
Halifax man didn’t pay HMRC but forked out on 2 houses and a wedding
The cash-splashing director of a nuisance call biz has been struck off for 12 years after breaking telemarketing rules and trading while insolvent.
Tony Abbott was the sole director of Reactiv Media, based in England, which used its large database of UK customers to make unsolicited direct marketing calls for a range of businesses.
However, the biz went into liquidation in April 2016 with estimated creditor claims totalling over £2m. Now, the UK's Insolvency Service has slapped Abbott with a ban on forming or directing a company for the next 12 years.
Group leader at the Insolvency Service, David Brooks, said Abbott had "flagrantly breached his duties to regulators and company creditors over an extended period". This includes failing to pay money he owed to HMRC, blagging a business grant his firm didn't deserve, and breaking telemarketing rules.
Abbott’s personal spending was a “particularly disquieting” part of the case, Brooks added.
This included £252,071 on deposits for two houses in the same month as the firm received "unjustified grant funds" of £38,326 from Leeds City Region Enterprise Partnership, after Abbott provided inaccurate information.
Abbott continued to splash out on while his firm did not, and then was unable, to pay its debts.
Reactiv Media's May 2015 draft accounts claimed net assets of £415,668, but – due to bad debt owed by an associated company – it actually had net liabilities of £289,528.
The biz then lost its main customer, which represented 70 per cent of its turnover in August 2015.
For the next six months, Abbott allowed the firm to trade even though it was insolvent; from that point the firm incurred some £155,701 in PAYE/NIC.
However, the biz didn’t make a payment after 10 July 2015, and PAYE/NIC payments for 2015/16 were "insufficient to even repay the April 2015 return period of £43,361", the Insolvency Service said.
At the same time, Abbott received some £177,664 in personal benefits from 1 September 2015 – some of which he spent on jewellery and his wedding.
Abbott also admitted that he "wrote off a loan owed by a company associated to me of £14,670, and transferred both an investment in that company valued at £75,000 and a further debt it owed of £93,550 to associated third parties".
As well as racking up these debts, the firm also broke the laws governing direct marketing calls, which say that calls cannot be made to people registered with the Telephone Preference Service.
The Information Commissioner’s Office received 601 complaints about such calls, and in 2014 fined it £50,000. This was later upped to £75,000 by first-tier tribunal – but no money has been paid.
The ICO said it would work with the Insolvency Service to "pursue all the options" to recover the money – and added that it was "pleased" Abbott can’t start a new firm.
Abbott’s disqualification order commenced on 27 December 2017.