A payday loan company has gone into administration owing an estimated £4.3 million to creditors – amid an investigation which saw its directors handed a 20-year disqualification.
The Insolvency Service, which published the report, said directors of speed-e-loans.com (SEL) used money from a pension liberation scheme to pay off company debts.
The three directors, which were individually handed a nine-year, six-year, and five-year ban from acting as a director of a company, were found to have breached their fiduciary duties and duties of care, skill, and diligence.
It said the directors allowed the company to receive funds to the value of £1,210,860 from private investors via pension liberation schemes.
The investors became liable to pay a substantial tax charge and were also exposed to the risk of penalties and loss of capital, it said. The Insolvency Service found that these funds were used entirely to pay off existing debts and not for their stated purpose, of investment and trading.
At the time of administration, SEL had assets listed at £150,269 and liabilities to creditors of £4,364,313.
Cheryl Lambert, Chief Investigator at the Insolvency Service, said: “The directors were collectively, and at the kindest interpretation, recklessly negligent in their desperation to save the company.
“Taking action against the people most responsible is a warning to all directors that such behaviour will attract a very significant sanction.”