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A travel agent has been jailed and banned from running companies after he failed to explain the whereabouts of a very large sum of missing funds.

The sentencing last week in Britain of Sunil Kumar Ralhan, a travel agent aged 37, provides much insight into how such matters are viewed and dealt with in the UK.

Sunil Ralhan appeared in Birmingham Crown Court in the English Midlands on 5 October 2018 and in addition to the court-ordered disqualification for seven years, the company director received a nine-month prison sentence.

The court heard that Sunil Ralhan was the sole director of Travelogue Ltd from November 2014, having bought the travel agency from its former director.

However, the company was placed in liquidation in May 2015 after it failed to recover payments from travel agents based abroad who had bought tickets through Travelogue. The travel agency was later dissolved in February 2017.

Independent insolvency practitioners were appointed to take charge of liquidating the company but Sunil Ralhan had failed to keep adequate accounting records, while also failing to share them with the insolvency practitioners and later, investigators from the Insolvency Service.

Under UK law, failure to deliver information requested by the liquidator while winding up a company is evidence of misconduct and in Sunil Ralhan’s case, it would have helped explain a deficiency in the liquidation of close to GBP 380,000 (about AUD 687,000) that was owed primarily to a single creditor of Travelogue.

Glenn Wicks, Chief Investigator for Britain’s Insolvency Service, said:

“As the director of the company, albeit on behalf of others, this man was responsible for keeping books and records. By not providing them he covered up what was almost certainly a fraud and that is why he received this imprisonment.”

At an earlier hearing, Sunil Ralhan accepted that he failed to keep accounting records that were sufficient to show and explain the transactions of the company.

Under British law, a disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
  • be a receiver of a company’s property

Persons subject to a disqualification order are bound by a range of other restrictions.

Britain’s Insolvency Service administers the country’s insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 (UK) to conduct confidential fact-finding investigations into the activities of live limited companies in the UK.

In addition, the agency deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Edited by Peter Needham