A recent Insolvency Service investigation exposed a £3 million insolvency fraud by former director Tariq Sarwar (59), who syphoned money from the sale of his company’s only asset and hid it through other firms. Sarwar’s scheme left creditors – including HMRC – with over £500,000 unpaid, while he and his family enjoyed a luxury Cheshire lifestyle (even a Rolls-Royce). The fraud involved a network of companies and accounts managed by Sarwar and associate Christopher Francis (40), who laundered funds back to Sarwar. Both men have now been sentenced (see table).
Table: Key facts on the fraud and sentences (Insolvency Service press release).
Sarwar’s company, A Property Management Ltd, owned a Salford business park. In mid-2018, HMRC moved to wind it up for £130,000 in unpaid tax. Sarwar knew the company was in trouble. In June 2018 he sold the property for just under £5.1 million.
Instead of paying creditors, Sarwar ordered the remaining £3.1 million into KYCA Trading Ltd, run by Francis. Within days, the cash was shuffled through a web of six other companies to hide its origin. Investigators later traced hundreds of thousands back to Sarwar’s family business and personal accounts. In one audit trail, £645,000 went to a firm controlled by his relatives, and a further £748,980 went back into his own account.
Worked example: Investigators traced £645,000 to a company controlled by members of Sarwar’s immediate family and a further £748,980 through other companies back to his family business and personal business account. Together, these traced transfers amounted to £1,393,980.
When questioned, Sarwar denied involvement. Francis claimed (incredibly) that £700,000 was paid as a deposit on five penthouses – a transaction he couldn’t verify with any documents. Investigators found this story unbelievable. Records showed that Francis had been disqualified as a company director for six years in March 2021 after failing to provide adequate accounting records for KYCA Trading Limited. (He told police his car with all business records had been stolen and burnt out overnight – another unverified excuse.)
While other creditors eventually received only a limited return, HMRC was later repaid in full. Meanwhile, Sarwar’s family was living a lavish lifestyle. He had a six-bedroom Cheshire farmhouse filled with designer goods, and his son appeared on TV show Rich Kids Go Skint in 2019 boasting he’d never been on a bus – the family owned a Rolls-Royce chauffeur for him. The contrast between the unpaid creditors and the family’s lifestyle became a notable feature of the case described by the Insolvency Service.
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Former director of the insolvent property firms. He admitted fraud charges: hiding company assets when winding-up was imminent and illegally acting as a director while disqualified. (Sarwar had already been banned for 11 years in 2013 for siphoning company funds – a ban that ran until late 2024.) In June 2026 he pleaded guilty, receiving 4 years in jail and a 10-year ban from being a director.
Business associate and controller of KYCA Trading Ltd. He laundered Sarwar’s money through other companies. Francis was also disqualified in 2021 for accounting failures. He pleaded guilty to money laundering and got 2 years 1 month in prison, suspended for 2 years, plus 250 hours of unpaid work. (Suspended means he only goes to jail if he breaks the law again.)
The Insolvency Service is now pursuing confiscation of Sarwar’s ill-gotten gains to ensure he doesn’t keep what was never rightfully his.
A company director disqualification restricts an individual from acting as a director or being involved in managing a company. Under the UK’s company director disqualification rules, a ban can last for up to 15 years, depending on the seriousness of the misconduct.
In practical terms, disqualified directors are heavily restricted. They cannot form, promote or be involved in any UK company without special court permission. Also, any company debt they incur can be treated as a personal liability if they secretly direct a firm.
Before entering an important business relationship, it can be useful to check whether a director is currently disqualified. GOV.UK provides access to the official register of disqualified company directors, including details of current disqualifications.
If a company is sold suddenly at fire-sale prices or large sums move through unexpected accounts, ask questions. Insolvency agents look for unusual money movements and lifestyle clues (like expensive purchases) that conflict with business figures.
Keep clear, independent financial records. The law requires directors to keep accounts and file taxes. Disqualified or unscrupulous directors often fail at this (as Francis did), which itself is a red flag.
The UK government’s Director Information Hub offers guidance on director duties and the signs of company distress. The Insolvency Service’s Investigations Unit can be contacted if fraud is suspected.
If you know someone is acting as a director despite a ban, you can report them. The Insolvency Service suggests anonymously tipping off Crimestoppers (0800 555111).
Taking these steps helps protect your business and the wider economy. As experts, we at Apex Accountants emphasise compliance and transparency to avoid such traps.
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At Apex Accountants, we specialise in corporate compliance, accounting and insolvency advisory. We help businesses and directors:
If you’re concerned about fraud risks, company debt or director misconduct, contact Apex Accountants. Our insolvency advisory services will guide you through UK regulations and help safeguard your business against illegal practices. Strong governance can also reduce the risk of poor financial oversight. Read our guide on aligning tailored non-executive director skills with company needs.
This £3 million insolvency fraud case shows the serious consequences of removing company assets from the reach of creditors and acting as a director while disqualified. Sarwar and Francis abused corporate structures to hide money, but the Insolvency Service’s investigation led to jail time and bans. It’s a stark reminder that disqualifications are serious. Keeping clear financial practices, performing checks on business partners, and acting lawfully are key. Our firm is dedicated to helping clients stay compliant and protect their assets – so fraudsters can’t exploit them.
Directors involved in fraud or misconduct during insolvency can face serious consequences, including director disqualification, personal liability in certain circumstances and criminal prosecution. Director disqualification can last for up to 15 years. GOV.UK
Yes. Acting as a director or taking part in company management while disqualified is a criminal offence. A breach can result in a fine or imprisonment for up to two years, while separate offences such as fraud can carry additional penalties. GOV.UK
Directors should keep accurate records, monitor the company’s financial position, protect company assets and seek appropriate professional advice as soon as financial difficulties arise. Once a company becomes insolvent, directors must consider the interests of creditors and should avoid actions that worsen their position.
A director is disqualified when a court bans them (often up to 15 years) for misconduct. They legally cannot manage or run any company during that ban.
It means secretly directing or controlling a company despite a court ban. This is a criminal offence, punishable by up to 2 years in prison. In this case, Sarwar did so and received an extra 10-year ban.
He sold his company’s property for over £5 million, then diverted £3.1 million through other companies instead of paying creditors. This deprived HMRC and suppliers of funds they were owed.
Francis ran KYCA Trading Ltd and helped launder Sarwar’s £3m. He admitted money laundering and got a suspended sentence and community service.
Investigators followed money through multiple firms. They tracked large sums back into Sarwar’s family companies and personal accounts, proving the scheme.
Creditors, including HMRC, were owed more than £500,000 when the fraud emerged. HMRC was later repaid in full, while other creditors received only a limited return.
He pleaded guilty to fraud and breaching his disqualification. The court jailed him for 4 years and banned him from being a director for 10 years.
The Insolvency Service is working on confiscation proceedings to recover funds. In similar cases, recovered assets can go to creditors. In this case, HMRC was repaid in full later.
Always verify directors’ credentials on Companies House, keep diligent records, and watch for unusual transactions. Seek professional accounting advice if a partner’s behaviour seems suspicious.
Contact professionals (like our firm) for advice. You can also report suspicions to the Insolvency Service or anonymously via Crimestoppers (0800 555111) if a ban is breached. Acting early can prevent serious losses.
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