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Insurance company

Type of business: Insurance agent – £15m turnover

GSI Services

The case:

Our client: Insolvency Practitioner

The company was an insurance agent selling insurance policies of major insurers such as Aviva. It went into liquidation after substantial clawbacks of commission. GSI was approached by the liquidator to carry out a forensic analysis of the accounts, which were not up to date.

Key facts

  • Accounts prepared to six months prior to insolvency on Xero.
  • Large sums paid out of company to holding company through complex inter-company transactions prior to insolvency.
  • Erratic trends in commissions received and clawed back during final months of trading.
  • Missing records such as e-mails and commission statements.

GSI solution:

The liquidator had possession of the server. Our in-house cryptologist analysed the hard drive and recovered 89,000 deleted e-mails along with attachments, which included hundreds of commission statements. We completed the accounts to the date of liquidation and examined commission statements to establish dates of clawback notifications.

Our final report showed that the directors had at least 2.4-month notice of clawbacks, which meant that they should have been aware of the potential losses before they paid out substantial sums in dividends and other payments to related parties. The directors agreed an out-of-court settlement to pay substantial sums back into the liquidation, to the benefit of the creditors.