Scottish Doosan dealer Balgownie Limited went into administration last year owing more than 拢3m, shortly after changing its name to FB Realisations Limited.
The fall of Balgownie/FB Realisations followed revelations that finance director David Smith had been submitting false VAT returns on behalf of the company for several years without the knowledge of his fellow directors.
David Smith, aged 61, of Kirkton of Bourtie, Inverurie, Aberdeenshire, has now been disqualified as a company director for 11 years following investigations by the Insolvency Service.
Mike Smith, chief investigator at the Insolvency Service, said: 鈥淒avid Smith鈥檚 conduct falls well below the standards we expect of company directors. Smith鈥檚 misconduct was hidden from his other directors and only came to light when a consultant queried finances at a board meeting and he admitted that he had been manipulating the accounts for several years.
"By deliberately suppressing VAT payments, Smith deprived the public purse of vital funds that should have gone towards essential public services such as schools and the NHS.鈥�
Balgownie Limited was set up on Companies House in 1973 but had a trading history dating back to 1907.
The undeclared VAT totalling 拢1,575,584 consisted of:
- falsely claiming VAT refunds on expenses that were actually for private or personal use rather than legitimate business purposes in the quarter ending December 2018
- deliberately understating the amount of tax due on sales made between March 2019 and March 2022, across multiple quarterly returns
- falsely claiming refunds by backdating purchases to earlier tax periods without having valid invoices or evidence to support these claims
Smith signed a disclosure with HMRC in March 2023 where he admitted deliberately under-declaring the amount of VAT his company should have paid.
Balgownie Limited went into administration in March 2024, with 24 people losing their jobs and creditors owed 拢3,163,795.
However, 15 jobs were saved when the business and its assets were bought out of administration by MacGregor Industrial Supplies the following month.
The secretary of state for business and trade accepted a disqualification undertaking from Smith, and his ban started on 21st July 2025. 聽It prevents him from being involved in the promotion, formation or management of a company, without the permission of the court.
Smith was declared bankrupt in August 2024 following a petition from one of the company鈥檚 creditors.
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