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Legislation & Litigation

Ban for director who caused vocational training company to take money without providing courses

By CreditMan Monday, August 17, 2015

Vinay Kanani has been disqualified from acting as a director for 8 years for recklessly entering into a scheme that made Trade Qualified Limited insolvent and allowing the company to trade to the detriment of creditors, specifically students who had paid for training courses that could never be provided.

An investigation by the Insolvency Service found he used the company’s cash reserves of over half a million pounds to ‘buy’ out previous owners and then took nearly £200,000 from students when it couldn’t provide courses.

The investigation also found:

  • Mr Kanani was appointed the sole director of Trade Qualified Limited on 5 October 2012. On the same date, he transferred £538,919 from Trade Qualified’s bank accounts to a limited company of which he was the sole director, for the express purpose of funding the purchase of Trade Qualified shares from its previous owners

  • A week later Trade Qualified’s main training provider went into liquidation, and a replacement was never found. Trade Qualified continued to take funds from new and existing students up to the date of its own liquidation. During that period Mr Kanani exercised absolutely no control over Trade Qualified’s affairs

  • Trade Qualified continued trading and received a further £198,878 from members of the public for schemes that it had no contract to provide, did not and could not provide

  • £140,720 was paid to entities controlled by an associate, who Mr Kanani allowed to control the finances of Trade Qualified without any oversight or control

  • £32,000 was used to pay for motor vehicles, when no vehicles had ever been purchased before and Trade Qualified had no business reason to purchase such

  • £39,317 expressly intended to be retained under the sale agreement to repay existing Corporation Tax was not used for that purpose

The students who had paid in advance, but were receiving no training, commenced various adverse publicity campaigns, and this, coupled with the depletion in cash reserves resulted in Trade Qualified entering Liquidation on 4 February 2013.

On 5 October 2012, Trade Qualified had £679,304 in its bank accounts. At liquidation, four months later, on 4 February 2013 Trade Qualified had cash reserves of £17,309 and a deficiency totaling at least £521,971.

Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:

  • Directors who cause the public to lose money can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place. In this case, Mr Kanani did nothing and knew nothing, resulting in the company funds being removed and members of the public being lured into paying for courses that never could be provided.

  • There was a complete failure to perform even the most basic of directorial duties. Taking action against Mr Kanani is a warning to directors of their responsibilities and that they cannot allow themselves to be ignorant of actions of others, or otherwise turn a blind eye to the activities of a company of which they are the legal steward.