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Thursday, 24 April 2014

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Boss ignored warnings to change Cumbrian restaurant's name

The owner of a restaurant that went bust with debts of more than £220,000 set up a new business under almost exactly the same name, a court has heard.

Fuzlul Haque photo
Fuzlul Haque

Highly respected businessman Fuzlul Haque, 53, registered his new venture as Cagneys Tandoori less than a week before his firm Cagneys Tandoori Limited went into liquidation.

He carried on running the King Street restaurant under that name despite being given three formal warnings that by doing so he was infringing the Insolvency Act by giving customers and suppliers the impression that the business was on a sound financial footing when it was not.

At Carlisle Crown Court, Haque, of Pennyhill Park, Penrith, pleaded guilty to using a prohibited company name.

Prosecuting counsel James Paterson said the law was designed to stop company directors cashing in on the good reputation of businesses which failed after hitting financial problems.

“They are prohibited from using an identical name – or a name so similar that it suggests an association with the previous company,” he said.

Mr Paterson said father-of-three Haque had been a director of Cagneys Tandoori Limited from June 2004 to May 2010.

Six days before that business went bust, he said, Haque “disguised its liquidation” by incorporating a new company called STH Penrith Ltd, of which he was the sole director.

This continued trading as Cagneys Tandoori, giving customers no clue that the old business had gone under with liabilities of £220,481, including £122,021 that was owed to the taxman.

In mitigation defence advocate John Smith said Haque – “who has traded very successfully over a number of years before the financial climate caused him problems” – had taken professional advice from insolvency experts.

None of them warned him that was he was proposing to do was illegal, he said.

Mr Smith said Haque, who submitted a sheaf of character references including one from ex Penrith and the Border MP David Maclean and Penrith Lions Club, had now renamed his restaurant the Spice Club but was running it as a sole trader, not as a limited company.

“Everything about it is different,” Mr Smith said.

Haque was ordered to do 200 hours unpaid community work, made to pay court costs of £1,314 and banned from being a company director for five years.

Judge Barbara Forrester took no action over a suspended prison sentence whose conditions Haque broke by committing this latest offence.

That 26-week jail sentence, suspended for two years, was imposed when he pleaded guilty in April 2009 to employing illegal immigrants.

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