A ‘phoenixed’ company has been wound up just days after the Government announced a crack down on directors who deliberately liquidate companies to avoid their liabilities.
TBL, a UK business locator trading as www.ukbusinesslocator.com, was found to have shared a common director and continued similar business activities to that previously carried out by a linked company, Movette Limited.
Movette was wound up in July 2017 on the grounds that it operated against the public interest.
However, due to TBL’s shared interest in Movette’s previous trading activities, the Insolvency Service launched a separate investigation into the company’s affairs following complaints from customers.
According to the report, the investigation was “severely limited” due to a “lack of co-operation from TBL’s director” who failed to produce adequate business records.
Following the investigation, the Insolvency Service concluded that it had enough evidence to petition the High Court to wind up TBL.
TBL accepted the evidence presented in court, including that the company had been abandoned by its director despite customers being sold annual advertising space in the online directory it purported to operate.
The Insolvency Service also found that customers received little to no commercial benefit as a result of purchasing advertising space, as well as failing to be notified that they were agreeing to a 12-month rolling contract. The High Court also heard that terms and conditions and contracts were not properly explained to them.
The regulator added that TBL had “continued the objectionable business model previously carried on by Movette by continuing to target the customers of Movette”.
Commenting on the report, David Hope, Chief Investigator with the Insolvency Service, said: “This company engaged in behaviour designed to extract money from advertisers under false pretences. Organisations contacted were duped into booking advertisements they had no need of placing, and which were of little or no commercial benefit to them.
“The Insolvency Service will take action to shut down such rogue businesses. Additionally, the business community should take steps to verify the credentials of any third party that contacts them claiming to be continuing the services previously provided by Movette Ltd and/or TBL (UK) Ltd.”