A construction boss who left creditors in the lurch after moving thousands of pounds to family members has finally been disqualified.

The Director of the construction company Railtrades Ltd has been banned after clearing almost £52,000 worth of assets and transferring it almost entirely to external parties, which included family members. This move is understood to have hurt the firm’s creditors as Railtrades was insolvent at the time.

Mr Lawrence McGovern, Director of Railtrades Ltd, 23-25 Fowler Road, Essex, had removed fixed assets of around £52,875 from Railtrades Ltd, also £51,900 was transferred to related parties. He was not able to provide evidence proving what happened to the firm’s assets.  

In May 2012, Mr McGovern instigated transactions totalling at £51,900 by Railtrades, leaving creditors high and dry. At this point, the insolvent company had stopped trading.

Around £23,600 was paid to a firm which was due to be directed by one of Mr McGovern’s family members, £13,000 was then transfer to that same family member and £15,300 was paid to another member of his family.

Railtrades Ltd entered into Creditors’ Voluntary Liquidation towards the end of May 2012.

Two years later, an application for a disqualification order was made by the Insolvency Service on behalf of the Secretary of State for Business, Innovation and Skills. Mr McGovern was issued a disqualification order in the County Court at Romford on the 14th November last year.

Melissa Davies, of the Insolvency Service said: “Mr McGovern’s ‘explanation’ to the liquidator with regard to the sale of Railtrades’ assets was that they were sold in September 2011 and yet he informed the Insolvency Service that the company was unable to continue trading after the disposal of assets.

“These explanations are conflicting as the company continued to trade until April 2012. With regard to the £23,600 paid to a connected company, Mr McGovern denied that there was any such connection but interrogation of the computerised accounts contradicted this, resulting in his disqualification.”

Mr McGovern’s disqualification order disallows him from acting as a Director of a company, taking part in the promotion, formation or management of a company or limited liability partnership, acting as an Insolvency Practitioner or being a Receiver of a company’s property.

For more information on disqualification order, please visit https://www.gov.uk/government/collections/information-about-company-director-disqualification.