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Fraud?

Carrying forward a loan to a liquidated company

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A company we are monitoring is carrying forward a loan to an associated company that has been liquidated. Is this fraud and a criminal offense presumably obtaining credit by decepetion etc etc. What should the sanction be? Its £400k. Never seen anything like it in 45 years

 

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By johngroganjga
10th Dec 2019 16:41

It may just be lack of attention to detail. I have seen worse. If it’s deliberate deception, are you aware of anything the company in question may have gained from it - new credit?

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By paul.benny
10th Dec 2019 16:51

When you say "carrying forward", I assume you mean reporting as an asset in their (statutory) accounts and that it's material to those accounts.

Is it dishonest? It would seem so.

Is it fraudulent? If the company uses false accounts to access credit that it doesn't repay, then yes.

Sanctions? BEIS and the CPS show very little appetite for prosecuting directors. If the company fails, the auditor (if there is one) may be held to account by their institute.

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By Justin Bryant
10th Dec 2019 17:01

Why not pick up the phone to whoever owns the company and ask them?

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By carnmores
11th Dec 2019 17:34

yes its 75% of net assets

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By lesley.barnes
10th Dec 2019 20:18

Why are you monitoring them if you don't mind me asking?

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By carnmores
11th Dec 2019 15:21

i dont mind at all asking is free :-)
client looking into buying the company

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By lesley.barnes
12th Dec 2019 10:29

I that case I would be very cautious too. I think alarm bells would be ringing for me. I think questions need to be asked about why the loan hasn't been removed in the first place. It does give concerns about what else might be hidden in there, I was going to ask if these accounts were audited but that doesn't guarantee anything these days.

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Caroline
By accountantccole
11th Dec 2019 12:15

Are the current accountants just rubbish? I picked up one that missed assets/ leases and a debtor balance to a sister co that had been closed several years earlier. All material numbers just careless lack of attention to detail perhaps

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