Business gained £300k through fraud, ordered to wind up

Liquor World (Scotland) Ltd was wound up in the public interest on 11 February 2021 by order of Lord Clark in the Court of Session, with Julie Tait and Stuart Preston of Grant Thornton UK appointed joint interim liquidators of the company, the Insolvency Service said in a statement.

The company, which appeared to have traded as a retailer and wholesaler of alcoholic beverages, came to the attention of the Insolvency Service after concerns were raised about the accuracy of its filed accounts.

Following confidential enquiries, investigators found evidence that the company had used false and misleading documents to obtain loans and finance from lenders.

During 2019 and 2020, Liquor World filed accounts that showed a dramatic, and unexplained, improvement in its financial position.

The drinks company then used this improved position to make several applications to lenders for various types of credit including loans, asset finance and invoice factoring finance.

Insolvency Service investigators established that to support some of the finance applications, Liquor World provided lenders with bank statements that falsely showed significantly higher levels of transactions than was actually the case. Other false or misleading documents were also produced to lenders by the company.

While a number of the finance applications were rejected by lenders, the investigators discovered that Liquor World successfully secured finance totalling more than £300,000.

Subsequently, the Court of Session wound up the company on the grounds that the company had been misused as a vehicle to obtain credit, operated in a manner that has caused harm and loss to credit providers, filed false and misleading accounts, and failed to maintain or produce adequate accounting records.

Liquor World’s current director, appointed in around April 2019, failed to co-operate with the investigation.

“Liquor World has blatantly and cynically used false and misleading information to persuade lenders to advance funds to it resulting in those lenders suffering a significant financial loss,” said chief investigator for the Insolvency Service David Hope.

“By acting swiftly in bringing winding up proceedings, we have prevented any further harm taking place at the hands of this company.”