INSOLVENCY SERVICE
News Release (Coms/Ins/49) issued by COI News Distribution Service
on 31 March 2009
A former director
of the Absolute Care Group has been banned for nine years for
actions which include dishonesty and failing to keep proper
accounting records following an investigation by Companies
Investigation Branch (CIB) of the Insolvency Service.
Carl Richard Hughes was a director and the controlling
shareholder of the Absolute Care Group of companies that operated
some 21 care homes in the UK. An investigation by the Companies
Investigation Branch concluded that he was 'unfit to be
concerned in the management of companies'.
The investigation into his conduct as a director found that he
dishonestly obtained (or produced) false invoices with values of
not less than £170,900 to conceal personal expenditure for the
benefit of himself and his family. He approved and signed
inaccurate accounts where personal costs had been treated as
corporate expenditure and signed dormant accounts that were false
and misleading for the trading period in question. He also failed
to keep proper accounting records, understated turnover, breached
the Companies Act by taking out illegal loans and failed to file
accounts in time.
Mr. Hughes had become the ninth director of the group to be
disqualified. When disqualifying him, the High Court Registrar Mr.
Nicholls concluded that his standard of competence and probity
fell "substantially and significantly short of that expected
from a director" and that his conduct "when taken
cumulatively amounts to deliberate or reckless conduct and in part
was dishonest and designed to benefit Mr. Hughes himself".
Another eight former directors from the group were also banned for
a total of 30 years after they offered undertakings not to be
involved in the management, formation or promotion of a registered
or limited company.
Company Details
The companies in the group are: UK Property Investment Fund
Limited GB Property Investment Fund Limited, Lincolnshire Property
Investment Fund Limited, Staffordshire Property Investment Fund
Limited (collectively 'the PIF companies'), Paramount
Healthcare UK Limited ('Paramount'), Universal
Healthcare Limited ('Universal'), Barclays Investment UK
Limited, Central Banco Developments Limited and RNHP Limited. A
further 21 companies operated each of the care homes on a
day-to-day basis under management agreements with the PIF
companies. These were known as the 'Alphabet' companies
as they used the initial letters of each of the care homes
concerned. For example, a company called NLCHB Limited operated
the Nash Lee care home. Other companies provided administrative
and financial functions within the group.
The details of unfit conduct for Mr. Hughes are as follows:
* That as a director of Lincolnshire PIF, UK PIF, GB PIF and/or
Paramount he procured the creation of false invoices for the
purpose of dishonestly concealing personal expenditure by these
companies for the benefit of himself and his family. The value of
the invoices was not less than £141,000 in the case of one
supplier and £29,900 in relation to another supplier. The invoices
purported to show charges in respect of building works at various
care homes when the works had, in fact, been carried out at a
property owned by Mr. Hughes and his wife.
* That he approved and signed accounts for UK PIF and GB PIF
which were inaccurate and not true in that they treated personal
costs of Mr. Hughes as corporate expenditure.
* That he approved and signed dormant accounts for Universal PIF
for the period ended 5 April 2003 knowing they were false and
misleading in that it was trading during the period in question.
* That as a director of UK PIF and GB PIF he failed to cause the
companies to maintain accounting records that complied with the
requirements of section 221 of the Companies Act 1985. In
particular he failed to distinguish between his personal
expenditure and that of the companies such that it is reasonable
to conclude that he had no intention of declaring such expenditure.
* That as a director of UK PIF and GB PIF he approved filed
accounts which understated turnover by £3,930,705 and £3,849,050
respectively by failing to include residents' fee income.
* That as a director of UK PIF, GB PIF and Universal he caused or
permitted these companies to make substantial loans to himself
which at 5 April 2005 were calculated as £560,257 contrary to
section 330(2) of the Companies Act 1985.
* That as a director of GB PIF he caused this company to
withhold substantial sums due to MBCHB Limited and NLCHB Limited
at the expense of those companies and their creditors.
* That as a director of UK PIF, GB PIF, Staffordshire PIF and
Lincolnshire PIF he failed to cause these companies to file
accounts by the date on which they were due in accordance with
section 244 of the Companies Act 1985.
Notes to Editors 1. The disqualification order for Mr Hughes
takes effect from 8th April 2009.
2. Disqualification undertakings were given by eight directors in
the group (current and former). The disqualifications were
accepted under Section 8 of the Company Directors Disqualification
Act (CDDA 1986) as follows:
Jacqueline Margaret Haldane 7 years
Wendy Ann Conn 4 years
Philip Leach 4 years
Sylvia Ann Chalkley 3 years
Kenneth Samuel Harper 3 years
Marilyn Ann Lunnon 3 years
Melvyn Edward Watson 3 years
Susan Lepori 3 years
4. The names of the 21 'Alphabet' companies are as
follows: BGCHL LIMITED;HARCHC LIMITED; CVCHD LIMITED; VVCHS
LIMITED; TLCHS LIMITED; SFPCHN LIMITED; SCCHN LIMITED; MLCHN
LIMITED; RVCHS LIMITED; LBCHS LIMITED; SWCHB LIMITED; BHCHS
LIMITED; NLCHB LIMITED; MBCHB LIMITED; HVCHS LIMITED; LGCHN
LIMITED; TMPCHB LIMITED; GSCHB LIMITED; LMCHD LIMITED; APCHP
LIMITED; HLCHL LIMITED;
5. Companies Investigation Branch ("CIB"), part of the
Insolvency Service, carries out confidential enquiries under
Section 447 of the Companies Act 1985 ("s447") and,
where necessary, takes further action in the name of the Secretary
of State. This can include winding up proceedings in the public
interest or disqualification proceedings against directors under
Section 8 of the Company Directors Disqualification Act 1986. The
Absolute Care Group of companies was investigated under s447 and
this provided evidence to support the disqualification proceedings
against nine current and former directors in total.
6. Section 8 of the Company Directors Disqualification Act 1986
allows the Court to make a disqualification order of up to 15
years for unfit conduct. On 2 April 2001, amendments were
introduced by the Insolvency Act 2000 allowing directors, with the
agreement of the Secretary of State, to avoid the need for a Court
hearing by offering an acceptable disqualification undertaking.
This has the same legal effect as a disqualification order made by
the Court and usually includes a schedule identifying the
director's unfit conduct. The consequences of breaching a
disqualification undertaking are the same as those for breaching a
disqualification order; a fine or imprisonment for up to two years.
7. The Insolvency Service administers the insolvency regime
investigating all compulsory liquidations and individual
insolvencies (bankruptcies) through the official receiver, to
establish why they became insolvent. The Service also authorises
and regulates the insolvency profession; deals with
disqualification of directors in corporate failures; assesses and
pays statutory entitlement to redundancy payments when an employer
cannot or will not pay employees; provides banking and investment
services for bankruptcy and liquidation estate funds; and advises
ministers and other government departments on insolvency law and practice.
8. Companies House maintains a public register of disqualified
directors that can be viewed at http://www.companieshouse.gov.uk.
9. Members of the public who think that they know of any person
who is acting in breach of a disqualification order or undertaking
should report that person's details to The Insolvency Service
Enforcement Hotline on 0845 601 3546 (24 hour message service).
10. For further information about Companies Investigation Branch,
the Insolvency Service and disqualifications see: http://www.insolvency.gov.uk
11. Media enquiries should be directed to: Lorna Dennis,
Communications Manager, Insolvency Service, 21 Bloomsbury Street,
London, WC1B 3QW. Telephone: 020 7637 6279.