A builder has been banned for six years after taking £190,000 from clients despite knowing his business was on the brink of collapse.
Aidan Mark Newman’s Montrose Design & Build business was formed in February 2015 but found itself in serious financial trouble just 18 months later.
Mr Newman contacted an insolvency practitioner about a possible Company Voluntary Arrangement in September 2016, which would have tied the failing business into a deal with creditors to pay off debts.
However, Mr Newman’s Woking-based firm accepted a further £190,000 from eight different clients before entering liquidation in January 2017.
Liquidators found that significant sums were owed to customers whose building work had not been completed, despite having made staggered payments to Montrose Design & Build.
Customers told investigators that Mr Newman admitted using payments from certain clients to fund work for others and purchasing materials using payments received when not all materials had been bought.
It was also discovered that the 47-year-old had been a director of another construction firm that had been liquidated in March 2015 – a month after he had set up Montrose Design & Build.
Following the investigation by the Insolvency Service, Mr Newman was banned for six years effective from 25 December 2018, having admitted causing Montrose to trade “at the unreasonable risk of creditors at a time when Montrose was insolvent, causing losses to creditors who have claimed at least £390,691 in the liquidation”.
Insolvency Service chief investigator Anthea Simpson said: “Aidan Newman continued to trade despite knowing Montrose was insolvent and caused financial distress to his clients.
“This ban should serve as a warning to other directors that if they continue to run an insolvent business in a way that is detrimental to either its customers or its creditors, they will be investigated and as a result could lose the protection of limited liability trading.”