.png)
An investigation by the Insolvency Service found that 48-year-old Alan Proto created and backdated fictitious documents to try and legitimise asset transfers totalling more than £1m when he knew the company was insolvent.
Mr Proto, a chartered accountant and Cambridge University graduate, set up GML Construction in 1991 and was the sole owner. He was named Entrepreneur of the Year in the 2012 Kent Excellence in Business Awards but his company collapsed into administration in January 2013 and was liquidated a year later. It had assets of £1,893,379 and liabilities of £4,463,599.
Mr Proto also ran a group of children’s nurseries and recently set up a price comparison website for nurseries.
However, Mr Proto is now banned from being a director of a company, or being involved in the management of a company in any way until 2027.
GML traded in the construction industry from 1991 to December 2012 and went into administration on 16 November 2013 and then into liquidation on 7 January 2014
The Insolvency Service investigation showed that from December 2012, in anticipation of GML entering a formal insolvency process, Alan Proto created false documentation and constructed a scheme intending to put him in a better position and assets beyond the reach of creditors.
At December 2012, GML was owed approximately £898,000 from a subsidiary that was involved in the sale of a property development. It was expected that GML would receive repayment in part of full following the sale of the development by the subsidiary.
Mr Proto created entries on a computer that purported to write off the outstanding debt due from the subsidiary and transferred the interest in the subsidiary for his benefit. He also created documents that purported to show other people agreeing to this at a time he had never met them or, in relation to companies, they did not exist. He then backdated genuine correspondence to try and validate the scheme. Furthermore, Mr Proto entered into transactions whereby his loan to GML of £150,000 was repaid ahead of other creditors.
His scheme was exposed because he had written out his plot in a computer, and these notes were retrieved after they had been deleted.
Commenting on the disqualification, Cheryl Lambert, head of outsourced investigations at the Insolvency Service, said: “This is a very significant ban, reflecting the severity with which the Insolvency Service considers director conduct. Directors of companies experiencing financial difficulties have a duty to act in the best interests of its creditors. This must include ensuring the transparency of the company’s trading activities. Mr. Proto’s conduct of GML’s affairs fell short of the judgment expected and to protect the integrity of the market, the Insolvency Service will use its powers to protect the business world when director’s act in this way.”
Alan Proto explained why GML failed in a frank interview with the Kent Messenger in February 2013. Read it here. (Link opens in new window.)
Got a story? Email news@theconstructionindex.co.uk
