A Swansea-based glass recycler has been banned from running companies for five years after she was found to have misled investors to secure funds for new equipment.
Karen John, 56, was appointed a director of Glass Tech Recycling Ltd (company number 07479819) in September 2011 and dealt with day-to-day running of the company.
Glass Tech Recycling was brought to the attention of the Insolvency Service after going into liquidation in April 2019.
An investigation found Ms John had misled investors – some of whom were also directors at the company – about the output of the machinery and prospective orders to secure the funds, the Insolvency Service said.
David Elliott, chief investigator for the Insolvency Service, commented: “Investing funds to purchase new equipment should have been a legitimate business activity.
“But Karen John specifically misled investors, including some of her fellow directors, into investing hundreds of thousands of pounds to purchase machinery at much greater risk than she had promised and which was ultimately of no benefit to the company.
“Directors have a responsibility to present an accurate picture to investors”
“Directors have a responsibility to present an accurate picture to investors to secure funds and Karen John’s actions demonstrate that if you choose to ignore this, then you could be investigated and possibly lose the privilege of limited liability trading.”
From 12 March 2020, John is banned from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
In her acceptance of a five-year disqualification undertaking, John did not dispute she presented inaccurate and misleading financial information to the board of Glass Tech Recycling, which resulted in investment and loans to the company of at least £695,000, the Insolvency Service said.
Following John’s appointment as director of Glass Tech Recycling in 2011, the company invested around £1.5 million into new machinery intended to produce higher quality recycled glass which would sell at a premium.
In 2019, the investors discovered John had been misleading them about the output of the machinery and prospective orders to secure the funds, the Insolvency Service said, adding John also invented a customer and fabricated attempts to recover debts from that customer to the extent that she claimed that Glass Tech Recycling had pursued the fictious customer through the courts.
Glass Tech Recycling went into voluntary liquidation in April 2019, with total liabilities of more than £4.1 million, after the investors learnt of John’s actions.