- Ishfaq Hussain secretly moved £250,000 of development land out of a failing company leaving creditors with nothing
- Hussain told investigators the land had gone to a stranger when it had gone to the mother of his eight children
- He signed documents under a false name, denied it was him, and was caught on CCTV
A Bradford housebuilder who transferred development land worth £250,000 out of his failing construction company to a firm controlled by his partner has been sentenced.
Ishfaq Hussain signed over the two pieces of land from Reeson Homes Ltd, a company where he was sole director, to Paddington Homes Ltd, as creditors closed in and the company faced insolvency.
Paddington Homes Ltd was incorporated on the same day Hussain instructed solicitors to transfer the land, with his partner appointed as its sole director.
No money changed hands despite transfer documents falsely recording a payment of £250,250.
The 54-year-old then claimed the land had been sold to an unconnected third party and that payment had been made.
Hussain, of Sunbridge Road, Bradford, pleaded guilty on the first day of his trial earlier this year to an offence of fraudulently transferring company property under the Insolvency Act 1986.
He was sentenced to six months in prison, suspended for 12 months, when he appeared at Leeds Crown Court on Monday 1 June.
Hussain was also disqualified as a company director for four years and ordered to complete 180 hours of unpaid work.
Mark Stephens, Chief Investigator at the Insolvency Service, said
Ishfaq Hussain deliberately moved his company’s most valuable asset into the hands of a connected company at the very moment his creditors were closing in. This was not a mistake or a misunderstanding but a calculated attempt to ensure that people owed money would never be paid.
Hussain repeatedly lied to investigators, denied any personal connection to his partner’s company, and even used false names to cover his tracks.
Directors who think they can defraud their creditors and then lie their way out of it should be in no doubt that we have the tools and the determination to hold them to account.
Reeson Homes Ltd was set up in Bradford by Hussain in November 2014.
In 2015 and 2016, the company purchased two adjoining pieces of land on the south side of Wilsden Road, Allerton, Bradford, known as Sandy Lane, with the intention of developing them for housing.
Hussain engaged a number of contractors to carry out development work, running up significant debts that Reeson Homes Ltd did not pay.
By early 2017, the company had no income and its debts to creditors exceeded £183,000. The Sandy Lane land was its only significant asset.
Hussain instructed solicitors to transfer the Sandy Lane land out of Reeson Homes Ltd on the same day that Paddington Homes Ltd was incorporated in February 2017.
Paddington Homes Ltd was run by Hussain’s partner who he later repeatedly told investigators was merely a business acquaintance he owed money to.
The two pieces of land were transferred to Paddington Homes Ltd by deed the following month, with paperwork recording a sale price of £250,000. No money was ever paid.
A winding-up petition was issued against Reeson Homes Ltd by a company owed more than £40,000 for work carried out on the Sandy Lane site. Reeson Homes Ltd was wound-up by the court in June of that year.
In the months that followed, Hussain made repeated false statements about the transfer to insolvency practitioners, creditors and official investigators.
At a creditors’ meeting, he described the land as having been sold to an “unconnected party”.
He told the Official Receiver – a court-appointed official who investigates how and why companies fail – he had no personal connection to Paddington Homes Ltd.
Hussain also signed a personal guarantee for work carried out on the Sandy Lane site under the false name “Adam Khan”, using a contact number registered to him.
When CCTV footage from the day the guarantee was signed was later obtained, it showed Hussain as the person who had signed it. He nevertheless denied having signed any personal guarantee and claimed “Adam” was a childhood nickname.
The land was subsequently recovered through civil proceedings brought by the liquidator at Bradford County Court in 2019.