A Birmingham-based wholesaler has been shut down amid concerns it was a ‘vehicle for fraud’.
SAK Wholesale Limited, based on the Alexandra Trading Estate in Handsworth, was wound up at a hearing at the High Court in Manchester on Tuesday (29 April).
The court was told there were concerns about the accuracy of the company’s annual accounts and that profits may have been overstated, enabling the directors to apply for thousands of pounds of goods and services on credit which were never paid for.
The directors failed to co-operate with Insolvency Service investigators, who discovered the company’s registered office in Handsworth had been stripped and abandoned, despite its website still being operational.
“There are serious concerns about SAK Wholesale being used as a vehicle for fraud,” David Hope, chief investigator at the Insolvency Service, said.
“The company has seemingly been abandoned - but still owes over £270,000 to its creditors. Despite this, payments of over £2.5million were made from the company over a period of two months in 2022, but without proper records, we were unable to confirm where this money came from.
“Accounts were not submitted for the last financial year, and the veracity of accounts submitted in previous years is in doubt.
“Despite the directors of SAK Wholesale refusing to cooperate with our investigation, the records we uncovered showed the company operated with a real lack of transparency and had a history of improper behaviour.
“This winding-up order will help protect the public and business community by ensuring SAK Wholesale can’t be used for future trading.”
Investigators from the Insolvency Service found the company had used its good credit rating to secure thousands of pounds of goods and services from suppliers.
Investigators also discovered that wording on the company’s website had been lifted directly from a local competitor’s website.
A lack of banking records for SAK meant investigators were unable to identify legitimate trading, customers or company expenditure – with £2.5m of payments made from a company account between April and June 2022 essentially unaccounted for.
Alongside this, one of SAK’s company accounts received an unauthorised third-party payment of £200,000 which SAK was not entitled to. This transaction was refunded by the bank when the third party discovered the money had left its account.
The Official Receiver has been appointed as liquidator of SAK Wholesale Limited.
