Restaurateur banned for diversion of £800K

AN Aberdeen restaurateur was banned for 11 years after he diverted customer payments worth close to £800,000 to a second account that hadn’t been declared to tax authorities.

Syed Shabbi Ahmed’s ban is effective from November 29, 2019.

The investigation into his conduct began after his company Blue Mango Tree Ltd went into liquidation in 2018.

The restaurateur was the sole director of his business.

Founded in 2009, the company traded as the ‘Jewel in the Crown’ restaurant in Aberdeen and for five years made full tax returns to the tax authorities.

For over three years, however, between 2014 and 2017, Blue Mango operated a second bank account which hadn’t been declared to the tax authorities.

Investigators from the Insolvency Service unearthed that when customers used the restaurant’s credit card machine to settle their bill, payments were diverted to the undeclared account.

Payments worth £800,000 made by customers was sent to the second account and investigators uncovered that the restaurateur transferred £123,000 to himself and withdrew a further £535,000 as cash.

This resulted in the tax authorities being owed just under £570,000 in the liquidation of the company.

In November last year, the secretary of state accepted a disqualification undertaking from Syed Ahmed after he admitted not declaring £797,587 of payments received to the tax authorities.

Robert Clarke, chief investigator for the Insolvency Service, said: “Syed Ahmed knew exactly what he was doing when he diverted funds for his own purposes, in an attempt to avoid paying the tax authorities what they were rightfully owed.

“This ban should serve as a warning to other directors tempted to help themselves first, you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service, with the possibility of losing the privilege of limited liability trading.”

The restaurateur’s disqualification undertaking means that he is banned for 11 years from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.