Council Presses for Investigation Into Conduct of Pier Company
HUGH SULLIVAN
Lions Hastings Pier Limited, the company which was managing the pier for its owner Sheikh Abid Gulzar, was put into voluntary liquidation in August this year. Its debts included over £82,000 owed in aggregate to its former engineer employees Peter Wheeler and Francesca Hill, who had brought a winding up petition in an attempt to force payment. The company also owed £31,346 in business rates to Hastings Borough Council (HBC).
The council has revealed that this rates debt covered a period of liability from 15 June 2018 – which was the date when Mr Gulzar completed his purchase of the pier – until 31 October 2020. In other words, Mr Gulzar, who was the liquidated company’s sole director and shareholder, avoided paying any rates for 28 months. (HBC has declined to say whether any rates have been paid since October 2020 and, if so, by whom).
A liability order for payment by the company was eventually obtained and, according to a council spokesperson, the account was passed to an enforcement agent but returned “unrecovered”. The council then instructed solicitors to bring a winding-up petition, but was notified that the company had already been placed in voluntary liquidation.
CREDITORS MEETING
Immediately prior to the liquidation, Mr Wheeler wrote to council leader, Paul Barnett, asking whether the council would join a committee of creditors who would ensure that there would be a thorough investigation by the liquidator of Mr Guzar’s conduct of the company. Mr Wheeler received no reply from Cllr Barnett and, when he attended the creditors’ meeting, found that he was effectively outvoted by Mr Gulzar: the latter claimed that the company owed personal debts to himself and other companies controlled by him in excess of £118,000. As a result, Mr Gulzar was able to secure the appointment of a liquidator of his own choice, Laura Walshe of the Keywood Group in Birmingham.
That liquidator has duties under the Insolvency Acts to investigate the conduct of the company by its director and to make a report to the Insolvency Service, a branch of the Department of Business and Trade. They in turn have the power to bring disqualification proceedings against a director who has committed financial wrongdoing. Mr Wheeler has been in correspondence with the liquidator to request a full examination and report “on matters that speak to potential financial recoveries”. According to its spokesperson, the council’s solicitors are pressing the liquidator to make a “thorough investigation” of Mr Gulzar’s conduct.
PREVIOUS LIQUIDATIONS
However, the prospects of any action being taken may be gauged from what happened after the liquidations of Chatsworth Hotels Limited and Lion Hotels Limited. Mr Gulzar was sole director of both companies. Chatsworth Hotels owned the hotel of that name on Grand Parade, Eastbourne; Lion Hotels held 100% shares in Chatsworth Hotels.
In 2015 the hotel was sold for a seven-figure sum. Nevertheless In January 2017 both companies were wound up together. The Statement of Affairs of Chatsworth Hotels revealed claims of over £850,000 made by unsecured creditors (including £140,000 from Mr Gulzar himself) and no assets to pay them. Lion Hotels had no assets other than book debts owed by Chatsworth Hotels which were worthless
The liquidations were conducted in tandem by a succession of insolvency practitioners. After a number of changes of liquidator over a six-year period, the eventual joint liquidators Greenfield Recovery Limited, also from a Birmingham office, signed off a “Notice of final account” in December 2022 in respect of both companies. In each case it stated:
“A review was undertaken into the Company’s affairs in the period prior to the Company being placed into liquidation in order to establish whether any potential asset recoveries or conduct matters required further investigations.”
Initial assessment indicated that further investigation work was required, and solicitors were instructed accordingly. However, they concluded that there were “no matters leading to asset realisations” nor would any further detailed investigations be “likely to result in further realisations for the benefit of creditors…. We confirm that I have complied with my statutory duties, including reporting to the Department of Business Innovation and Skills in respect of the conduct of the Company’s directors. My report and disclosures are necessarily confidential and are not available to creditors”.
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