Cllr. Johar Khan and the E11 BID Co.

During his relatively short time in the public eye, Cllr. Johar Khan has attracted a fair amount of publicity, little of it flattering. The commentariat has had fun with his personalised number plates and ostentatious wedding. Peers have been less than impressed by his appetite for work, with one, the illustrious James O’Rourke, alleging: ‘When he and I were Councillors in High Street ward he did sod all’. And the fact that Cllr. Khan was not only much involved in the machinations that prefaced the implosion of the local Liberal Democrats, but also then jumped ship to Labour, has hardly burnished his reputation for either personal loyalty or political principle.

However, one aspect of Cllr. Khan’s activities still remains obscure, and that is his involvement in our old friend, the E11 BID Co..

It should be said at once that according to Companies House – the official authority on all things corporate – Cllr. Khan and the E11 BID Co. never crossed paths. That is to say, while Companies House lists a number of directors as either joining or leaving the E11 BID Co., of Johar Khan, there is no mention.

However, the E11 BID Co., as we know, had idiosyncratic ways, and so it is little surprise to find that, if the company’s own records are consulted, up pops Cllr. Khan at once, listed from early 2009 as a director, and then from September 2010 to May 2011 as no less than ‘the Finance Director’. We learn, too, that though he was eventually voted off the board at the 2011 AGM (a unique achievement as far as I can see, and indicative of his standing amongst colleagues), subsequently he was nevertheless appointed an ‘adviser’.

It is certainly strange that the E11 BID Co. failed to register Cllr. Khan at Companies House, and that Cllr. Khan then did nothing to rectify the matter. However, there is more.

According to the minutes, Cllr. Khan rarely contributed at directors meetings. The one major exception was at the January 2011 board, when he presented a fairly detailed financial report. This was largely unremarkable, though also broadly positive. The E11 BID Co. was owed substantial sums of money. A new accountant had been appointed. And, Cllr Khan added, ‘All VAT, PAYE and tax matters had now been brought up to date’.

No doubt his fellow directors left the meeting reassured. Imagine their consternation, then, seven months later, when they picked up their auditor’s management letter and found it contained the following:

‘During the course of our audit we noted that the company has employees but does not have a payroll scheme registered with H.M. Revenue & Customs (“HMRC”). We further noticed that income tax and national insurance were being deducted from the employee’s [sic] wages but were not being paid over to HMRC…Significant fines and interest may be imposed due to late filing of the returns and payment of the tax due….

We understand that the company is now registered for VAT with HMRC. This means that the company will need to prepare and submit VAT returns electronically every three months.

We understand that the March and June 2010 VAT returns have not yet been completed although these are now past the filing deadlines’.

And imagine their further consternation when they read the succeeding management letter, dated 5 December 2012, and found it repeated almost exactly the same observations:

‘During the course of our audit we noted that income tax and national insurance were being deducted from the employee’s [sic] wages but were not being paid over to H.M. Revenue & Customs…significant penalties and interest can be imposed due to the late filling of returns and payment of the tax due…

We understand that the company has been registered for VAT with H.M. Revenue & Customs since March 2010. This means that the company must prepare and submit VAT returns electronically every three months.

The VAT returns for the year being audited were not completed at the balance sheet date although these are now past the filing deadline. H. M. Revenue & Customs can impose surcharges and interest on the late payment of VAT and the filing of returns’.

How did Cllr. Khan get it so spectacularly wrong? He claimed to be working in banking (first at Lloyds TSB, then at the Bank of Scotland) so presumably was familiar with the basics of tax, and the responsibilities that come with a senior board position. Of course, it is possible that his words were inaccurately minuted, but then he should have made sure they were revised. After all, he had duty not just to the truth, but also to his fellow directors, particularly as some, without financial skills, no doubt would have relied upon his specialist guidance.

All that being the case, is Cllr Khan really the kind of person we want in public office? I’ll let the reader decide.

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