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Essex lettings company director Ghanshyam Sarup Batra has received a High Court ban preventing him from involvement in the promotion, formation or management of any company for seven years. He was also ordered to pay costs of more than £11,500.
The order, made in March, but announced by the Insolvency Service this week, was made after it was found Batra had transferred money from the company to his own bank account after it had gone into Receivership.
The company involved was Dylan Lettings Worldwide Limited, which had been incorporated in 2010 and which at the time of its insolvency in 2017 had only one shareholder and one director, Batra. At the time of his appointment, Batra described himself as a ‘hotelier’.
DLW had acted as a management company for three apartment blocks that had previously been converted from hotels. The freeholds of the buildings were owned by three separate companies, but Batra was the registered leaseholder on all the apartments.
In April 2017, Ghanshyam Batra and the three companies were ordered by the court to pay a confidential settlement connected to £6.5m in mortgage arrears.
When the settlement was not paid, the court appointed a Receiver to take control of the buildings and leaseholds, and restrictions were placed on Batra limiting him from exercising his powers as a director of Dylan Lettings Worldwide.
In October 2017 the lettings company went into Creditors Voluntary Liquidation with liabilities of at least £571,000. A statement of affairs showed £45,000 owing to Batra, over £200,000 in various taxes, almost £112,000 in rates and more than £75,000 to British Gas.
Liquidation of Dylan Lettings Worldwide triggered an investigation by the Insolvency Service, which found that Ghanshyam Batra breached the court order limiting his powers by transferring almost £106,000 from the company’s bank account into his own.
The money had been transferred in tranches, the first £50,000 transfer was made just 45 minutes after the Receiver had been appointed, and a further £49,000 the following morning.
‘Ghanshyam Batra transferred almost £106,000 from the company to his personal account, denying funds owed to creditors’, said Insolvency Service deputy head of insolvent investigations Lawrence Zussman.
‘The director stated the monies were owed to him for outstanding rent and other business-related expenditure, but no rental agreement was in place.
‘This significant ban should act as a warning to other directors who do not act in their company’s best interests that we will take action where it is appropriate to do so’.
Batra’s letting business was the subject of a 2014 brush with the Upper Tribunal when he tried to overturn of a decision of the Financial Services Authority, now the Financial Conduct Authority, that he should no longer be allowed to perform controlled functions.
At the time he had been the sole director of a mortgage broker which had made multiple mortgage applications on his behalf. These related to his 2006 purchase of Dylan House which contained 23 self-contained studio flats. He subsequently purchased York House and Warwick House which contained 78 studio flats.
The financial arrangements were complicated but involved purchase of the freeholds to a British Virgin Isles registered company and granting of person leases to Batra. He subsequently sought 78 mortgages on the flats.
The FCA investigated the deals and decided Batra, through his mortgage broking business, had submitted mortgage applications contained false and misleading information, knowing it to be false.
Batra appealed to the Upper Level Tribunal. He lost.
The Tribunal found the FCA had failed to establish that Batra had been deliberately dishonest. ‘We have concluded, however, that Mr Batra displayed a lack of integrity in that he was reckless as to the truth of statements made to Wave and Mortgage Express. In the light of our finding that Mr Batra lacked integrity in relation to the submission of the mortgage applications and in his dealings with the Authority, we consider that prohibition is appropriate’.