TWO former bosses of retailer Manor Furniture have been banned from holding directorships for five years after putting customers’ funds at unreasonable risk.
The disqualification of Kevin Jon Grey, 42, and Paul Collins, 41, follows an investigation by the Insolvency Service.
Investigators found the pair accepted deposits totalling more than £100,000 from customers when they ought to have known there were no reasonable grounds for believing they would be able to provide the goods.
From September 12 to November 11, 2012, Grey allowed Manor Furniture to take deposits from customers totalling £59,735, with Collins taking £40,614 from September 12 to October 19 the same year.
The company had been insolvent from September 12, according to investigators.
Manor Furniture went into administration on November 21, 2012. At the time the directors owed the company £316,789.
Both directors admitted causing or allowing Manor Furniture to continue to take deposits for goods, despite knowing the company was insolvent.
Grey and Collins were disqualified from being involved in the promotion, formation or management of a company for five years from August 1 and July 30, 2014 respectively.
Kevin Grey, who now works on the shop floor at the new Manor Furniture Centre in Cheney Manor, said he and Paul were simply following the advice of administrators to continue trading as normal.
“For nearly 20 years we did everything right,” he said. “We moved across the road with big costs and we took an accounts lady to help us out with the finance and she ended up helping herself to a lot of money. She was arrested and prosecuted.
“When we went into administration we were hoping an outside investor would rescue us.
“The administrator said to carry on trading as normal. I suppose we were hoping for a miracle. That was our naiveté.”
Paul Collins did not return to the resurrected Manor Furniture Centre in 2013 as Kevin did.
Sue Macleod, the chief investigator at the Insolvency Service, said: “The directors accepted deposits from customers when the company was not in a position to fulfil those orders.
“There is no place in the business community for such behaviour and it is likely to lead to investigation by the Insolvency Service and result in censure.”
Prior to administration, the firm had a reputation as the leading independent furniture retailer in Swindon It was voted the best furniture trader in the Adver’s Best Of Swindon Awards 2011. In 2009 it weathered the credit crunch by upgrading its store and sold £100,000 of goods on the first day of one sale. By Easter 2013, the firm was rescued by Nigel Pattinson, a commercial property landlord, and renamed Manor Furniture Centre.
Theft and cash flow trap led to downfall
Nigel Pattinson, the owner and director of Manor Furniture Centre Ltd, the new company that relaunched the Manor Furniture name after it went into receivership, said the firme was caught in a classic cash flow trap when the bank withdrew a funding promise to let them expand their stock for the new premises, which was three times the size of their old one He said: “At the same time they had money stolen from them by a book keeper.
“It finally brought down a good business with over 10,000 clients in the Swindon area and a reputation for good customer service.
“Only one of the former directors, Kevin Grey, is now employed by the new company and he is involved with the sales side.
“He was in the old firm and his in-depth knowledge of furniture and beds is of great help to customers.”