Lettings agency director banned from office after 'diverting' £900,000

The director of a lettings company has been banned from holding company office for eight years following the revelation that he diverted £900,000 into his personal bank account and that of another company.

Nicholas Constable, director of property agency Xenex Developments, failed to keep adequate records and has left creditors out of pocket and has been disqualified for eight years “for failing to ensure the company dealt with its rental income in the correct manner or maintained or preserved adequate accounting records.”

The result of the finding by the Insolvency Service has led to an undertaking given by Constable that now prevents him from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.

Xenex Developments Ltd traded as a property development company from an office in Weybridge, Surrey.

An Insolvency Service investigation found Constable diverted rental income totalling nearly £900,000 into his personal bank account and that of a connected company. This action contravened the terms of a legal charge and resulted in missed interest of nearly £400,000 for the charge holders.

Of the total diverted rental income, Constable has failed to provide accounting records which would verify whether £679,063 had ever been repaid or used for the benefit of the company’s creditors.

"The director failed to act in the best interest of the company and its creditors and failed to ensure that the company operated in a transparent way by providing sufficient records to explain company transactions” says Robert Clarke, group leader of insolvent investigations at the Insolvency Service.

The agency went into administration in November 2015.