Director banned after restaurant chain submitted false VAT returns

A Brazilian flag is seen on a bike next to a sign reading "Change lane as overpassing. Thanks" during the 4th Annual World Bicycle Forum, which theme is "Cities for All, in Medelin, Antioquia department, Colombia on February  26, 2015. The event goes through March 1st and gathers over 5000 cyclists of around the world. AFP PHOTO / Raul ARBOLEDA        (Photo credit should read RAUL ARBOLEDA/AFP/Getty Images)

The boss of a Brazilian restaurant chain that went out of business has been hit with a ban after submitting false VAT returns.

Volnei Augusto Borgert, who ran Camboriu Restaurants, has been disqualified from acting as a director for seven years for causing the business to file false VAT returns and for taking £47,280 from the company in the last month of trading, after being told not to.

The disqualification follows an investigation by the Insolvency Service.

The Secretary of State accepted an undertaking from Mr Borgert on 1 February 2016, not to act as a director of a limited company for 7 years from 22 February 2016.

The investigation found that Mr Borgert caused Camboriu to file three inaccurate VAT returns in 2012 and 2013, resulting in £162,684 not being declared as due.

Furthermore, after he had taken advice from an insolvency practitioner that the company wasn’t solvent, he withdrew £47,280 from the company.

Camboriu Restaurants Limited was incorporated on 5 November 2010 and started trading in 2011 as a chain of Brazilian themed restaurants, under the trading style Tropeiro, latterly in Aberdeen, Glasgow, Sheffield, Nottingham and Chester.

Camboriu entered Administration on 31 January 2014 with estimated assets of £116,783 and liabilities totalling £1,354,780.

The Insolvency Service investigation also found that when already in arrears with HMRC, Mr Borgert falsified three VAT returns and paid the lesser amount shown on those returns to be due, thereby concealing from HMRC the full extent of the VAT debt.

The company’s own records showed that £162,684 was knowingly under-declared.

From 6 December 2013, having been advised by HMRC (on 27 November 2013) that a winding up petition would be issued, and by an Insolvency Practitioner (on 3 December 2013) that the company should be placed into Administration and no creditor should get preferential treatment, he withdrew £47,280 for his own benefit.

The company’s share capital was £1. The Administrators sold the underlying business to an unconnected party. Mr Borgert was the only director of Camboriu throughout.

Commenting on the disqualification, Cheryl Lambert, chief investigator at the Insolvency Service, said: “This is a significant ban reflecting the seriousness with which the Insolvency Service considers the conduct of the director. In overseeing the submission of false data to HMRC, which hid the true position, Mr Borgert allowed the company to continue trading using that undeclared tax as a reservoir of working capital. Despite being made aware of the true position, he wilfully ignored instructions from professionals and extracted money to reduce his personal exposure to loss.”

Lambert added: “Directors of companies experiencing financial difficulties have a duty to act in the best interests of creditors, not to mitigate their own position or simply extract what money remains.”

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