In business, there can be a thin line between success and failure. This means that depending on how lucky you are or what other factors fall into play, you may find that you can be a success whereas you may have been a failure at other times. There is also a lot to be said for the fact that at some times businesses will make brilliant decisions that get them a lot of plaudits and then at other times, some really bad decisions can be made. This is the case for one award winning businessman who was highly regarded in his field but who is now shunned as a disgrace.
This is the story of Alan James Proto who has been outlawed from acting as a company director for a period of 12 years. The Insolvency Service carried out an investigation and decided that he, while acting in the role of a company director, created false documents and also attempted to defraud creditors of his company.
Proto lives with his family in Church Steadings in Waverton and he was found to have made up and then backdated illegitimate files with the aim of transferring assets of over £1m. This action was undertaken he was fully aware that his firm, GML Construction based in Kent, was going to go under. The firm eventually collapsed, causing a loss of 200 jobs.
Proto was hailed as the entrepreneur of the year – Proto was previously honored with the “Entrepreneur of the Year Award” at the Kent Excellent In Business Awards, known as the KEiBAs, in 2012. That was an excellent time for him but March of 2015 was not as successful with the ban placed upon him. He is not able to hold any company directorship for a period of 12 years. Proto has provided the Secretary of State with an undertaking that he will be a company director or be involved with the management of a company for a period of 12 years dating from the 29th of December in 2014. His firm traded in the construction industry from 1991 all the way through until December 2012, with the firm being placed into administration on the 16th of November in 2013. The firm was then placed into liquidation on the 7th of January in 2014. At this point, the company held assets of £1,893,379 and liabilities of £4,463,599.
It was uncovered in the investigation undertaken by the Insolvency Service that from December of 2012, fully aware that GML would be entering a formal insolvency process, Proto created a number of false documents. This was done with the intention of placing himself into an improved position, and to also ensure that a number of assets were removed out of the reach of the creditors of the company. In December of 2012, GML was said to have been owed just less than £900,000. This money was due from a subsidiary which took part in a property development sale. There was an expectation that GML would receive some or even the full payment from the subsidiary for the sale of the property. It was at this point that Proto made up entries which was said to have written off the debt that was due from the subsidiary and then transferred the interest in this subsidiary, a move which was undertaken for his own benefit.
Proto created a range of false documents – Proto also managed to create documents which indicated that other people were in agreement of this move, even though he had not met some of the people referred to in the documents. There were also companies referred to in the document that didn’t actually exist. The level of his deception also led to backdating correspondence relating to the scheme in an act to try and validate it.
A major reason in why the plan never succeeded can be found in the fact that on the same computer, Proto outlined his plans and these notes were able to be retrieved by the team carrying out the investigation.
Cheryl Lambert is the Head of Outsourced Investigations at the Insolvency Service, and she spoke to local media after the case, saying; “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 directors act in this way.
If you face an Insolvency Service Director Disqualification, it is best to seek legal advice as quickly as you can. Having expert and professional guidance in place is the best way to provide you with an opportunity to create the best possible defence.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.