The director of companies which provided financial services and ran a trading room in Chelmsford has been disqualified for eight years.
James Lau, also known as James On-Loon Lau, was the director of GG Blue Sky Limited and WFM Management Services Limited.
The former operated as a derivatives trading room while the latter provides financial advice to companies and individuals.
They both went into liquidation in September 2013 with an estimated deficit of £7.8m.
An investigation by the Insolvency Service’s Company Investigation Team found Mr Lau failed to ensure adequate books and records relating to both companies were maintained, preserved or delivered up to the liquidator.
The records could not account for more than £4m income and expenditure from Blue Sky and £500,000 income and expenditure from WFM over a period of less than two years.
A large proportion of the funds allegedly related to client pension and other investment management but the Insolvency Service was unable explain who these monies belonged to or where they went leaving clients out of pocket.
Neither could the records explain what happened to properties purchased for over £600,000 and payments totalling £41,300 made to an internet gambling site.
Rob Clarke, group leader of insolvent investigations north, said: “This failure to maintain, preserve or deliver up records is totally unacceptable, especially where creditors and shareholders are owed substantial amounts, and potential assets were not preserved or disclosed for realisation by the liquidator.
“The Insolvency Service has ensured that such behaviour will not be tolerated and that robust action will be taken against directors where misconduct is found.”
In relation to Blue Sky, the accounts for the year ended 31 December 2011 did not list any motor vehicles as assets but one was purchased using funds totalling £22,854 from its bank account on 29 and 31 March 2011.
Meanwhile a holiday home was purchased using funds from Blue Sky’s bank account on 10 April 2012 and 28 May 2012 totalling £42,062.
Pitch fees and an energy bill relating to this holiday home in the amount of £2,267 were also paid.
The Insolvency Service said it had not been possible to determine if this was a company asset or if these sums were applied to a director’s loan account.
It also said it had not been possible to determine the reason for payments to an internet gambling site and whether they were for the benefit of either company.
On 23 November 2016 James Lau signed a director disqualification undertaking banning him from being a director of a company for eight years. The undertaking was accepted by the Secretary of State on 24 November 2016, and the period of disqualification will begin on 15 December 2016.
