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Directors showed `a complete lack of probity`

02 November, 2009

The electrical engineering and motor control specialist Allenwest Systems is one of five West Sussex companies that been wound up in the High Court following an investigation by the Government’s Companies Investigation Branch (CIB), part of the Insolvency Service. The investigation found that the companies, all of which were controlled by the same three current or former directors, owed substantial sums to creditors and appeared to have been trading while insolvent.

“Our investigation found that there was a complete lack of commercial probity in the management of these companies,” says Robert Burns, head of investigations and enforcement at the Insolvency Service. “We found no evidence that any of the companies sought to pay over their income tax or all of their VAT liabilities and there were also significant and repeated failures to prepare and file statutory accounts and returns at Companies House.”

The former main director, Leslie Kerrison, had a history of involvement with companies which had gone into administration or liquidation. In 2008, he was disqualified from acting as a company director for 2½ years after an earlier company he was involved with also failed.

Allenwest Systems traded until late 2006, but according to the Insolvency Service, three of the other companies “appeared to have little business function other than to channel income from the trading companies towards paying salaries and other benefits to the three members of the management team”.

Between September 2006 and May 2007, the annualised salary costs of the management team worked out at more than £370,000, but debts were allowed to accumulate within the companies, including more than £250,000 owed to HMRC.

In March 2007, several members of Allenwest’s staff signed an MBO agreement and bought the rights to certain Allenwest product lines, including its Westcentre and 7700 motor control centres, LVAC changeover panels for railway substations and DC contactors and spares. This business continues to trade as Allenwest Brighton, based in Peacehaven.

At the same time, Whippendell Marine acquired the rights to the Westmaster AC contactors and to Allenwest’s Powerline and Westline industrial starters. The rights to the Easybrake range of brakes for woodworking machines were acquired by SoftStart UK.

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