The UK’s Insolvency Service has handed disqualification orders to directors of two investment companies, totalling 29 years.
Shahram Shoraka received the maximum 15-year ban from the high court at the end of February 2020, while his business partner, Peter Hellman, had already been disqualified for 14 years in October 2018.
They are not allowed to act as directors or be directly or indirectly involved in the promotion, formation or management of a company, without the permission of the court.
The pair were directors of Omada Investment Management and Omada Holdings.
They planned to turn the Omada group of companies into a financial services platform and, at the same time, own a portfolio of institutions.
Lies and deception
Hellman and Shoraka managed to secure £9.5m ($11.7m, €10.8m) from individual investors to set up the investment management company.
They provided written agreements about how the money would be invested; but they used the funds to cover company expenses, overheads and office refurbishment costs.
To cover this up, the two directors gave false information to investors about the status of their investments and failed to ring-fence their funds.
But it didn’t stop there, as they misrepresented assets, liabilities and company turnover to the auditors by submitting inaccurate accounts over three years.
The Insolvency Service said that, between July 2013 and February 2017, the duo failed to disclose the loss of investment securities worth approximately £500,000 to a client.
They then went on to ask for additional investments from the same client, but used the funds to pay the lease on their trading premises.
Becoming insolvent
In 2015, an associated company within the Omada group advanced a loan of £4.2m plus interest to allow the firm to buy a Maltese bank.
The loan was supposed to be repaid by June 2016, but the firm did not manage to meet the deadline.
Omada Investment Management and Omada Holdings were forced to enter insolvency proceedings as it had an estimated deficit of just over £19m.
Mark Bruce, chief investigator at the Insolvency Service, said: “Shoraka and Hellam were unscrupulous in their behaviour when it came to illicitly securing millions of pounds from their investors, spending the funds on anything but what they had signed-up to.
“They compounded their misconduct by providing false information and documentation to both investors and their auditors to perpetuate the fraud.
“This represents the most serious misconduct, and their substantial bans, some of the most restrictive terms that can be applied, will remove these two from the business arena, protecting the public and creditors from further abuse.”
