Liquidator tells court couple were involved in fraudulent trading

Two former directors of a high-end vehicle import and export company were involved in fraudulent trading by moving money between different entities in diverse jurisdictions, a liquidator has claimed in Commercial Court proceedings.

Kieran Sherlock and his wife Helena Sherlock, of Cashel, Cloonloo, Boyle, Co Roscommon, as directors of the company Kleio Tool and Plant Hire Ltd, were involved in the import and export of supercars such as Rolls Royce, Lamborghini, Ferrari, Porsche and Range Rover.

Liquidator Myles Kirby says they were engaged in fraudulent trading and/or significant laundering of monies across multiple jurisdictions.

The company traded using the name “Go Direct”.

Mr Kirby was appointed liquidator to Kleio by the High Court in April 2019.

Accounts

He uncovered what he says were large sums being passed through company bank accounts which were often then transferred immediately or very quickly out of those accounts to other parties, in particular to a related corporate entity in the UK.

Mr Kirby seeks declarations from the court that the couple were guilty of carrying on business with intent to defraud or that they were knowingly party to the carrying on of company business in a reckless manner.

He also seeks orders including that they be made personally liable for the company’s debts and that they be disqualified from holding directorships for a period the court deems appropriate.

While large amounts of money flowed through the company bank accounts relating to the sale and purchase of the high-end cars, there were no books and records proving the vehicles were imported or exported, Mr Kirby says. There was a “wholesale absence” of almost any records while they were directors, he says.

The business apparently involved the importation of vehicles from the UK which meant they availed of zero VAT rating for the purpose of the UK and using firms that had just been incorporated and subsequently struck off for failing to make returns.

The Revenue Commissioners, says Mr Kirby, undertook audits of the company’s affairs and discovered serious non-compliance with tax and duty obligations and raised assessments against the company for €2 million.

While the Sherlocks submitted an appeal against the assessment, they have never substantiated their appeal, he says.

Mr Kirby says a core contention by the Sherlocks is that they were replaced as directors in 2018 by a man based outside Birmingham in England.

Mr Kirby does not believe this assertion can withstand any level of scrutiny including that the company effectively ceased trading when they resigned.

Contact

Although Mr Kirby says this man in England eventually made contact with him (Mr Kirby), on the material available there was no basis for believing that this man had any involvement with the company.

Likewise, a second man in the UK who had purportedly replaced them as a director but who denied having even heard of the firm also had no involvement, Mr Kirby says.

While the company was first incorporated in March 2012 with a principal activity of renting demolition/construction equipment and registered in the names of others, it was clear it did little or no trade prior to the Sherlocks taking over as directors in May 2015, the liquidator says.

Prior to the use of “Go Direct” (through the website godirect-cars.com), the Sherlocks traded through another company called Autovillage Sales and Maintenance Ltd, now in receivership, until their resignation from Autovillage in 2015.

Mr Kirby says they were replaced as directors of Autovillage in December 2015 by two UK directors including one called Nicholas Vladimir Gligic, who the liquidator says was the “controlling mind” behind a UK registered firm called Rioni Ltd.

A UK Revenue and Customs investigation in 2007 found Rioni played an integral role in a sophisticated “missing trader Intra-Community” VAT fraud as a result of which Rioni was denied a claim in the UK to input tax on the purchase of mobile phones and other electronic components for €22 million.

The findings of the UK Revenue in relation to Rioni “bear an extremely close resemblance” to the facts of the Kleio case, Mr Kirby says.

The case was admitted to the fast-track Commercial Court on Monday by Mr Justice Denis McDonald who rejected arguments on behalf of the Sherlocks’ counsel that it was not a Commercial Court matter or that it should await the outcome of their tax appeal. The case comes back in April.