Transport firm boss in £1m supply chain finance scam

20 August 2018

The boss of a logistics firm has been banned from running companies for nine years after filing more than £1m worth of false invoices in a supply chain finance scam.

Neil Hughes, former director of Birmingham-based Contact Transport, falsely claimed the company had done more than £1m worth of work to secure advance payments from lenders.

The company had entered into an invoice discounting agreement (IDA) with an external lender, allowing them to get advances on cash they were owed, rather than waiting for clients to pay.

But an audit by the Insolvency Service (IS) after the firm went into administration in April 2017 found Hughes had caused Contact Transport to claim more funds from the agreement than they were owed by clients. As a result, the company wrongly secured £1,030,115 between November 2016 to April 2017, at the cost of its invoice discount provider.

Hughes, 51, resigned from his role as director of the haulage and parcel delivery company in June 2018. He did not deny the allegations, and is banned from managing, promoting or forming a company until 2027. 

Martin Gitner, IS deputy head investigator, said that while securing advanced payments is a “legitimate method” for gaining funds, Hughes “submitted false documents to wrongfully and deceptively claim more money than was actually owed to Contact Transport”.

“Nine years is a significant ban and this should serve as a warning to other directors that the Insolvency Service has strong enforcement powers to remove dishonest or reckless directors from operating a business for a considerable amount of time.”

Last week it emerged that £50bn was locked up in late payments, affecting nearly two-thirds of small businesses.

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