Two directors banned after deceiving short-term lenders

Two directors banned after deceiving short-term lenders




Two directors of healthcare software company Digital Spark Limited have been disqualified for 20 years after deceiving short-term lenders.

Michael Joseph Bell, 41, of Chester-le-Street in County Durham, and 44-year-old Gavin Rupert Kipling, of Darlington, were found by the Insolvency Service to have provided altered bank statements to obtain £109,000 from short-term lenders.

The investigation also revealed that the pair had diverted £161,800 of company funds, which had been obtained through secured loans, to their personal bank accounts - outside the terms and expressed purpose of the loans.

Cheryl Lambert, chief investigator at the Insolvency Service, said: “These are very significant bans reflecting the severity with which the Insolvency Service considers the conduct of the directors.

“The concealment of the withdrawal of funds by the directors, and the provision of false financial information, shows a woeful disregard for creditors’ interests with intent to deceive.

“In essence they lied to get money, including to their own employee whose job it was to maintain accurate accounts.”

Digital Spark Limited had spent an estimated £500,000 on developing an IT-based diagnostic programme for cancer care.

With the project only 80% complete and no confirmed market for the product, the directors took out loans totalling £600,000 from specialist local funds in order to help with cash flow, from which £80,800 was transferred to each of the pair’s personal accounts against the terms of the funding.

Between May 2013 and May 2014, the firm also took out a number of payday-type loans totalling nearly £300,000.

The pair submitted bank statements to support the loan applications, in which relevant information regarding transactions to other loan companies were edited out to reflect a higher account balance.

In addition to the deception, both men were found to have failed to maintain accurate accounting records, changed electronic data to obscure or hide payments to themselves and created entries that inflated the company income.

Mr Bell and Mr Kipling also filed inaccurate financial statements at Companies House, which showed Digital Spark Limited to have been solvent when it was insolvent.

Incorporated on 9th March 2010, Digital Spark Limited traded from The Toffee Factory, Lower Steenbergs Yard, Ouseburn, Quayside, Newcastle upon Tyne, NE1 2DF.

The firm was placed into liquidation on 10th July 2014.

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