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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3857
Experience:  Solicitors 2 years plus PQE
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I sold my Company 18 months ago, The buyer bought 75% of the

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Dear Sir/Madam
I sold my Company 18 months ago, The buyer bought 75% of the shares, I still own 25% of the shares.The money realised as a result of the sale was handled by and paid to me via my Solicitors. The buyer paid the buying amount through his limited company.
I am based in London . so English Laws would apply.
As soon as the sale was completed, the buyer started withdrawing money from the company, by transferring funds from the newly bought company into his own personal account through a series of payments.
When asked about these transactions, the buyer claimed that he has repaying himself for the money he had paid to buy the company.
My questions are
1) Can this not be challenged under Money Laundering. Legislation?
2) The buyer's Solicitor paid the money to my Solicitor as sale proceeds, Was it not The Solicitor's responsibility to confirm, declare what the source of these funds were for the buyer ?
3) What are my options ?
4) What is your advice
Kind Regards
Syed I Rizvi
M 00447768 004 707

Thank you for your question and welcome. My name is ***** ***** I will assist you.

(1) Technically this would not be money laundering on its own. It may be a breach of fiduciary and his responsibility as a director. It is also unfair prejudicial to you as the minority shareholder. Was this money declared as a dividend?

(2) Yes his solicitor should have determined the source of funds before accepting them. Where do you suspect that the funds came from that make them proceeds of crime?
Was the intention for him to buy your remaining shares? Kind regards AJ

Customer: replied 3 months ago.
Thanks Alex,
1) No the money was not declared as a dividend.
2) The funds came, I believe from one of his Companies.
But then the money sent into a pure personal account, Thus benefiting an individual rather than the source it cane from?

Thank you. Admittedly that does make the transaction suspicious but it is still not laundered money - you would need to know an underlying reason. Is it from crime proceeds, has he defrauded the tax man? This may just be someone that does not understand company procedure and administration. What do you want to achieve - are you worried this is devaluing your shares? Kind regards AJ

Customer: replied 3 months ago.
Very much so,
By taking the money out of the company, he is not only devaluing my share but also putting the very financial survival of the company in jeopardy.
He fully understands,
If this is not money laundering , then what other rules/regulations or breaches of the law are being committed here.
Money Laundering is not confined to just proceeds of crime.
We are talking here of hundreds of thousands of Pounds of money being paid into someone's personal account.
What are my options, what can I do ?. Who can I report it to ?

Thank you. This is potentially a breach of fiduciary duty, breach of S.172-177 of the Companies Act 2006 and misappropriation of company funds. Without knowing the back ground details I would doubt this could be fraud as it just seems so overt. You would have claims against him under S.996 of the Companies Act - protection against unfair prejudice and also derivative actions against him as a director. You could sue for the recovery of the money. It is worth noting - if the company goes insolvent he will have to repay this money - do you actually want to carry on in the company with someone you cannot trust? Is it worth having him buy you out of your remaining share?

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