Explosive new documentary reveals the lavish lifestyle of bankrupt businessmen

Millionaire businessmen are exploiting weaknesses in the bankruptcy system to keep their assets and enjoy lavish lifestyles, an investigation has found.

An explosive probe by BBC Scotland has revealed some of the country's biggest bankrupts have been able to hold on to their wealth despite declaring themselves insolvent.

Among them is former boxing promoter and convicted fraudster Barry Hughes, who declared himself bankrupt in 2014 owing £10m and claiming he had no assets.

Hughes, 39, was filmed by the BBC team along with his wife driving a line of luxury cars worth half a million pounds.

In England and Wales the number of insolvencies has increased 10 per cent in the last 12 months, with the latest UK figures showing more than 20,000 people a year going bankrupt, owing hundreds of millions to creditors.  

Former millionaire mining tycoon Graham Gillespie went bust with debts of £12.8 million in 2012 and failed to disclose multiple assets to creditors during his bankruptcy.

One asset being sought by his bankruptcy trustee to pay debts was an exclusive private registration plate – GG1 – worth £180,000.

Gillespie told the authorities he'd sold it to pay off a gambling debt. But just a few months ago the BBC filmed Gillespie, 60, at the plush Gleneagles Hotel in Perthshire driving a new Bentley – complete with GG1 licence plate.

When contacted, Hughes and Gillespie refused to provide a comment.

The programme, BBC Scotland Investigates: Millionaire Bankrupts Exposed, also found serious weaknesses in the system designed to punish bankrupts who try to hide their assets or the extent of their wealth.

Any bankrupt found to have been dishonest or reckless during the process can be given a Bankruptcy Restriction Order (BRO).

Under the order, which can last for up to 15 years, a bankrupt is banned from being a company director. They also cannot form, manage – or even give the impression of managing – a limited company. A breach could lead to up to two years in prison.

More than 1,200 BROs have been imposed across the UK but Richard Dennis, Chief Executive of Scotland’s Accountancy in Bankruptcy (AiB), admitted to BBC Panorama that no one is actively monitoring them. 

Malcolm Scott, a former Treasurer of the Conservative Party in Scotland, was given a BRO in 2015 after he was found to have lied to his bankruptcy trustee.

The former multi-millionaire was found to have transferred shares, secretly sold a luxury car without declaring the proceeds, and failed to declare a speedboat and other assets in the Bahamas. He is under the restrictions until 2021.


BBC Panorama: Millionaire Bankrupts Exposed highlights cases involving some of the country's most high-profile bankrupts. They include:

Malcolm Scott was a multi-millionaire grain merchant. As one of the biggest donors to the Conservative party and the party's Treasurer in Scotland, he lent his private jet to high profile cabinet members including David Cameron and William Hague.

Scott's business empire was declared bankrupt in 2012 with debts of more than £41 million.

During the bankruptcy investigation, Scott didn't declare assets such as his speedboat, wine collection, fishing rights and assets in the Bahamas. He also claimed a break-in at his house, with some items later found being sold at auction.

The authorities served him a BRO whereby he was banned for more than five years from being a company director and forming a company. He is also banned from managing a company or giving the impression he is managing a company.

However, an undercover investigation by BBC Panorama reveals how Scott tells investors he's at the top of the corporate structure of a housing development company called Sandnewco One Ltd, where 'he makes all the decisions'. Describing its on-paper company director Alexander Duncan as a 'silent partner'.

Another revelation in BBC Panorama's investigation reveals that Scott lists himself as a person with significant control in a company called Northside Residential. Although this is legal, he is also registered as the person who formed the company – which is illegal.

When BBC Panorama gave Alexander Duncan a right of reply regarding Sandnewco One Ltd he said that Malcolm Scott was 'an employee' of the business with 'no executive decision-making authority'. Malcolm Scott was also given a right of reply and issued a response via his solicitor in which he denied he was a director of any company.

The trustee in charge of the case launched an investigation to claim back money owed, believing Gillespie was hiding assets, later taking him to court twice.

One of the assets that they tried to claim back was Gillespie's £180k personalised registration plate, which he claimed he sold off to pay a gambling debt.

However, BBC Panorama's investigation found that the number plate in question was still on a Bentley, driven by Gillespie.

Mr Gillespie was offered a right of reply however his lawyer said he didn't want to speak to BBC Panorama.

But Mr Scott, 54, was running a property company with interests across the UK in breach of his BRO, the BBC found.

It sent in an undercover reporter to pose as a businessman interested in investing in his developments. One was run by a company called Sandnewco One Ltd, whose registered director was a man called Alexander Duncan.

Despite the restrictions, Malcolm Scott told the undercover investor that the company was run by himself and Mr Duncan, who was a 'silent partner'.

When asked by the undercover investor about the corporate structure of the company, he claimed to be at the top, agreeing that he was the 'head shed'.

The programme also claims to have found Mr Scott had formed a property company called Northside Residential Ltd, another breach of his BRO. 

Richard Dennis said: 'There is no positive monitoring of BROs. We rely on creditors to take account of the fact that there is that public record of the red flag against these debtors and we would of course follow up any information about debtors breaching the terms of their BRO directly.'