Thomas Brown’s firm JKS Brickwork went into liquidation two years ago owing more than £1m to suppliers.

A subsequent probe by the Insolvency Service found Brown traded for 11 months beyond the submission of latest accounts, but failed to provide any trading records from December 2009 to the liquidation.

This stopped liquidators from verifying JKS Brickwork’s expenses during this time, which Brown claimed to be £8.6m. Nor could they verify the amount owed to the brickwork firm by its clients, which was valued as £1.6m in the previous year.

As a result accountants could not trace cash owed to JKS Brickwork’s creditors and pay its debts.

Mark Bruce, a chief examiner at Company Investigations (South) in London, said: “This investigation uncovered very significant assets and expenses that could not be explained adequately to the liquidator, which prevented him from doing his job properly for the creditors.

“Bad book-keeping causes clear harm to creditors, damages business confidence and threatens economic growth.”