MK One founder Mark Gerald Brafman and his former business partner Bulbinder Singh Sandhu have been jailed for acting as company directors while disqualified.
Brafman was sentenced at Southwark Crown Court today to eight months in prison, after he pleaded guilty on September 9 to four counts of contravening the Company Directors Disqualification Act 1986.
Sandhu was sentenced to five months in prison after pleading guilty to two counts of contravening the Act. Both have been disqualified from being company directors for 12 years.
Brafman previously has been disqualified from being a director twice, once in 2001 until 2008 and again in 2010 until 2025, according to records at Companies House. The latter disqualification is understood to relate to another of Brafman’s companies, Atlantic Fashions. It is not known when Sandhu previously was disqualified.
Brafman co-founded the value chain MK One (then Mark One) in 1985. In February 1996 it was bought from administration by Philip Green (now Sir Philip), who later sold a majority stake back to MK One’s managing director Elaine McPherson and finance director David Thompson.
In 2004 it was bought by Icelandic group Baugur and after Baugur’s own financial problems the business was acquired by restructuring specialist Hilco in spring 2008. Within weeks Hilco appointed Deloitte to sell MK One. In May 2008, Brafman acquired MK One via a new company, Jet Star Retail. Brafman and Sandhu were listed as shareholders in Jet Star Retail, which traded as MK One across more than 100 stores nationwide.
The government’s Insolvency Service launched an investigation into claims Brafman and Sandhu were acting as directors, despite not using the title of director.
A spokeswoman for the Insolvency Service said: “Two disqualified directors, Mark Brafman and Bulbinder Singh Sandhu, were sentenced to a combined 13 months in prison and disqualified for a further 12 years each for being in control of a company while banned from doing so.
“Their convictions - handed down on 16 October during a hearing at Southwark Crown Court - follow an initial investigation by the Insolvency Service and a criminal investigation and prosecution by the Department for Business, Innovation and Skills.”
Jet Star Retail went into administration in November 2008, with Neil Bennett of Leonard Curtis appointed as administrator. It was put into liquidation in May 2010.
“They were shareholders of Jet Star, but while they didn’t hold the post they were effectively acting as directors,” Bennett confirmed to Drapers today.
He said the unsecured and preferential creditors of Jet Star recently have been paid a dividend amounting to 10p in the pound. Leonard Curtis received £10m in claims and has paid out around £754,000 to unsecured creditors and around £250,000 to preferential creditors, including employees.
One creditor, thought to be a supplier to MK One, told Drapers he lost £600,000 when the business went into administration. He has yet to receive a dividend.