Two Indian-origin men, who were directors of a number of hotel companies in the UK, have been disqualified from acting as directors by regulators in the country for manipulating accounts and causing a bank losses of 31.767 million pounds.
Novtej Singh Dhillon and his ex-wife, Sarina Thiara Dhillon, have been disqualified from acting as directors for 11 years and four-and-a-half years, respectively.
“An Insolvency Service investigation found that Mr Dhillon caused, and Ms Dhillon allowed, the companies to operate in manner which lacked probity, as a result of which a bank suffered a loss totalling 31.767 million pounds,” said a statement issued by the Insolvency Service on Wednesday.
The Dhillons were directors of Dhillon hotels Limited, Liongate Hotel Limited, Crown Hotel (Amersham) Limited which entered administration on 20 September 2012, and PHB Realisations 2013 Limited (formerly Paragon Hotel (Birmingham) Limited) and Paragon Birmingham Limited which entered administration on 21 September, 2012.
The companies had operated a number of hotels around the UK including The Olde Bell Coaching Inn at Hurley-on-Thames, The Lionsgate Hotel at Kingston-upon-Thames and The Paragon Hotel in Birmingham.
All the hotels were subject to the same bank lending facility and cross guarantees.
The investigation found the two utilised the various companies for personal expenditures, which were attributed by the group accounting department to director loans.
Cheryl Lambert, chief investigator at the Insolvency Service, said, “Directors have a duty to ensure that the procedures they construct and oversee comply with the law. Directors who do not comply with this basic obligation can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.
“In this case, Mr Dhillon was responsible for the construction of a long term and complex web of lies, by manipulating the internal financial systems of a group of companies. Additionally, the sale of a very large asset was claimed to be occurring resulting in almost 13-million-pounds of further lending being made, which were then used within their empire of companies and which allowed the Dhillons to continue to benefit from their continued operation.”
In court proceedings relating to the business affairs, a judge branded Dhillon as a man who “regards truth as a merely optional extra when doing business”.
“Ms Dhillon took no action to prevent the long term implementation of that deceit, whilst benefiting from the continued operation of the companies and the increased funds overdraft extensions,” Lambert added.
The Insolvency Service investigation found that the bank was knowingly provided with management accounts, which presented an inaccurate picture of the true financial and trading position of each company and the companies together.
At the time of Administration, or closure due to bankruptcy, the bank was owed around 48.304 million pounds.]