The Insolvency Service has succeeded in securing the disqualification of the director of two City of London recruitment agencies, the third time this year that recruitment-related businesses have come under this kind of sanction.

Julian East of Charminster, Bournemouth, was found to have exaggerated the financial health of one of his recruitment companies, Orange Angel, including inflating turnover figures by £4.2m and profit figures by £400k.

An Insolvency Service investigation also found that he put himself ahead of other creditors of his other company, Orange People Solution Group, in violation of his duty as director, including a transfer from the company’s account to his personal bank account in settlement of his director’s loan, instead of paying off more than £370k in unpaid taxes.

East has given an undertaking that he will not be a company director for six years, with the disqualification starting on 27 February. Both businesses had their registered offices at Great Queen Street, London WC2, before going into administration in the summer of 2010, with liquidation occurring in July 2011. Orange People Solutions had two further branches in Manchester and Bristol.

When Orange People Solutions went into administration, there was a total of £951,068 in claims from unsecured creditors on its books.

Mark Bruce, a chief examiner at The Insolvency Service, comments: “Creditor confidence in the viability of a company is vital for the smooth flow of business transactions that support economic growth. Directors who disregard their obligations to their creditors are toxic to the business environment and the Insolvency Service will use its powers to remove them from it.”

Other cases this year that have seen recruitment and employment businesses under the scrutiny of regulators include a Newcastle-based pair who charged jobseekers for a ‘careers pack’ and had them ring a premium rate phone line, and the director of a merchandising staffing firm who failed to pay £650k owed to HM Revenue & Customs.