Mr Ferguson was the sole director of Allied Commercial Factors Limited which provided financial services and operated from Cannock, Staffordshire. The company went into Liquidation on 14 October 2014, owing an estimated £1,159,011.

An Insolvency Service investigation found, specifically, that the company had failed to maintain, preserve or deliver up records that could explain payments of £20,529, 834 from the company bank account. This included £329,567 paid directly to Mr Ferguson and £177,337 paid to an associated company.

The Insolvency Service also found that Allied failed to deal with its tax affairs and at Liquidation, the Company owed HMRC in excess of £290,000 for VAT, penalties and charges.

Commenting on the disqualification, Sue MacLeod, chief investigator at the Insolvency Service, said:

Company directors should note from this enforcement result that any failure to maintain or deliver up adequate accounting records is likely to lead to serious censure.

In this particular case, Mr Ferguson failed to deliver up the Company’s accounting records with the result that transactions amounting to more than £20,500,000 could not be explained.

This disqualification is a reminder to others tempted to do the same that the Insolvency Service will rigorously pursue enforcement action to seek and remove from them the privilege of trading with limited liability to protect the public for a lengthy period.

Notes to editors

Allied Commercial Factors Limited (Company Registration No. 07382287) was incorporated on 21 September 2010 and traded from Morston Court, Cannock, Staffordshire, WS11 8JB.

John Alexander Ferguson, (date of birth 08 November 1963) was the sole registered director from incorporation, until Liquidation.

The company went into Liquidation on 14 October 2014. On 22 May 2017, the County Court sitting at Birmingham made a Disqualification Order against Mr Ferguson, effective from 12 June 2017, for a period of 9 years.

The matters of unfit conduct upon which the Secretary of State’s claim was based were that Mr Ferguson failed to ensure that Allied Commercial Factors Limited maintained and/or preserved adequate accounting records from 01 March 2012 to 14 October 2014, the date of Liquidation or, in the alternative, he has failed to deliver them up to the Official Receiver. The last accounts filed by ACF at Companies House were in respect of year ending 29 February 2012.

As a result the Insolvency Service has been unable to determine, in the absence of purchase invoices, whether payments in the total sum of £20,529,834 paid from ACF’s bank accounts between 01 September 2012 and Liquidation on 14 October 2014 represent legitimate company expenditure, specifically:

• whether monies in the net sum of at least £329,567 paid to Mr Ferguson between 07 September 2012 and 12 May 2014 represented legitimate company expenditure
• whether payments in the net sum of at least £177,337 paid to a company connected to Allied between 17 September 2012 and 03 September 2014 represented legitimate company expenditure
• whether 68 cheque payments and a further 7 related payments in the total sum of £818,350 paid by Allied in the period from 03 September 2012 to 07 May 2014 represented legitimate company expenditure

It was also not possible to determine the asset position of Allied at liquidation with regard to:

• whether debtors in the sum of £1,427,063 identified in Allied’s abbreviated accounts to year end 29 February 2012 have been properly collected for the benefit of Allied
• whether a horse/part share of a horse purchased by way of funds in the sum of £120,000 paid from Allied’s bank accounts between 04 April 2013 and 06 August 2013 was an asset of Allied
• whether the horse remained an asset of Allied at Liquidation on 14 October 2014
• whether, if the horse was sold prior to Liquidation, the proceeds of the sale were properly received by Allied
• whether 11 vehicles identified by HMRC during an investigation into the operation of Allied’s VAT account were assets of Allied
• whether these vehicles remained assets of Allied at Liquidation on 14 October 2014
• whether, if any of the vehicles were sold prior to Liquidation, the proceeds of any sale were properly received by Allied

Furthermore Mr Ferguson failed to ensure that Allied’s VAT was properly accounted for in respect of quarters ending November 2011 to November 2013. As a result, HMRC raised an assessment in the sum of £78,385 in respect of expenses on which HMRC considered that input (purchase) VAT, should not have been claimed and further disallowed monies in the total sum of £198,343 reclaimed by ACF on purchases and other inputs in respect of quarters ending May 2012 and November 2013:

• Mr Ferguson was the sole director and shareholder of ACF from incorporation on 21 September 2010
• on 12 July 2013 HMRC advised that they would be visiting the premises of Allied to carry out an inspection of its VAT account
• HMRC visited the offices of Allied on 22 August 2013 and reviewed the accounting records provided by Mr Ferguson
• HMRC raised a number of queries in respect of purchases and expenses against which input VAT had been claimed by Allied which it could not identify as legitimate company expenditure from the accounting records provided by Mr Ferguson
• between 20 September 2013 and 16 June 2014 HMRC asked Mr Ferguson for an explanation as to why these expenses were considered to be legitimate company expenditure against which VAT could be claimed
• Mr Ferguson failed to provide HMRC with an explanation as to why these payments were considered as legitimate company expenditure
• on 16 July 2014, HMRC advised Allied that it had disallowed monies in the total sum of £198,343 reclaimed by Allied on purchases and other inputs in respect of quarters ending May 2012 and November 2013
• HMRC raised an assessment in the sum of £78,385, plus penalties, in respect of VAT claimed against purchases/expenses for which Mr Ferguson failed to provide an explanation. Allied were informed of this assessment by a letter dated 15 September 2014
• HMRC advised ACF that at 24 September 2014, Allied’s liability to HMRC in respect of VAT stood at £203,398.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

• act as a director of a company
• take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
• be a receiver of a company’s property Persons subject to a disqualification order are bound by a range of other restrictions.

The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures. Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.

BEIS’ mission is to build a dynamic and competitive UK economy that works for all, in particular by creating the conditions for business success and promoting an open global economy. The Criminal Investigations and Prosecutions team contributes to this aim by taking action to deter fraud and to regulate the market. They investigate and prosecute a range of offences, primarily relating to personal or company insolvencies.

Media enquiries for this press release – 020 7596 6187

You can also follow the Insolvency Service on:

Streaming giants such as Netflix and Spotify have helped keep online infringement in check with innovative new streaming models, however new threats are beginning to challenge recent progress.

• streaming giants such as Netflix and Spotify are keeping infringement levels stable
• consumers accessing exclusively free content at an all-time low
• approximately 7 million internet users still accessing some illegal content
• infringers turning to illicit streaming devices and stream ripping websites
• confusion amongst consumers regarding the legitimacy of some streaming sites

The Online Copyright Infringement (OCI) Tracker, commissioned by the UK Intellectual Property Office (IPO), has revealed that 15 per cent of UK internet users, approximately 7 million people, either stream or download material that infringes copyright.

Legitimate streaming has grown in popularity once again with Spotify seeing a noteworthy 7% increase in user numbers since 2016.

However illicitly adapted set top boxes, which allow users to illegally stream premium TV content such as blockbuster movies, threaten to undermine recent progress. 13 per cent of online infringers are using streaming boxes that can be easily adapted to stream illicit content. In an effort to understand where further action might be necessary to address this problem the IPO has also published a call for views. The Government response is due to be published later this summer.

Legal streaming of music is also under threat. Stream-ripping, by which internet users remove and store content away from its original advertising-revenue generating platform, is becoming a significant problem.

A report commission by the IPO and PRS for Music has revealed that 15% of internet users have been involved in stream-ripping. It also reveals that nearly a quarter (24 per cent) of “stream-rippers” believe that their action were not infringing IP rights.

The use of stream-ripping websites increased by 141.3% between 2014 and 2016. In a survey of over 9000 people, 57% of UK adults claimed to be aware of stream-ripping services. Those who claimed to have used a stream-ripping service were significantly more likely to be male and between the ages of 16 to 34 years.

Ros Lynch, Copyright and IP Enforcement Director at the IPO, said:

It’s great that legal streaming sites continue to be a hugely popular choice for consumers. The success and popularity of these platforms show the importance of evolution and innovation in the entertainment industry.

Ironically it is innovation that also benefits those looking to undermine IP rights and benefit financially from copyright infringement. There has never been more choice or flexibility for consumers of TV and music, however illicit streaming devices and stream-ripping are threatening this progress.

Content creators deserve to be paid for their work – it is not a grey area. This government takes IP infringement extremely seriously and we are working with our industry partners and law enforcement to tackle this emerging threat.

Robert Ashcroft, Chief Executive, PRS for Music:

We hope that this research will provide the basis for a renewed and re-focused commitment to tackling online copyright infringement. The long term health of the UK’s cultural and creative sectors is in everyone’s best interests, including those of the digital service providers, and a co-ordinated industry and government approach to tackling stream ripping is essential.

Notes to editors

1. The Online Copyright Infringement tracker spoke to a UK universe aged 12+ years, using a mixed methodology of online (CAWI) and face-to-face (CAPI) approaches to ensure that we represented the full population including lighter and none internet users. Fieldwork was run in March 2017 speaking to a total of 5,267 individuals.

2. The stream-ripping survey spoke to a UK universe aged 16+ years, using a mixed methodology of online (CAWI) and face-to-face (CAPI) approaches to ensure that we represented the full population including lighter and none internet users. Fieldwork was run mid-November to early December 2016 speaking to a total of 9,112 individuals.

3. The UK Intellectual Property Office is responsible for Intellectual Property (IP) rights in the United Kingdom, including patents, designs, trade marks and copyright.

4. PRS for Music represents the rights of over 125,000 songwriters, composers and music publishers in the UK. As a membership organisation it ensures creators are paid whenever their music is played, performed or reproduced, championing the importance of copyright to protect and support the UK music industry. The UK has a proud tradition of creating wonderful music that is enjoyed the world over and PRS for Music has been supporting the creators of that music since 1914.