Eugenijus Nalivaika was sentenced to 15 months in prison, suspended for 18 months, when he appeared at Leeds Crown Courty. He was also ordered to complete 250 hours of unpaid work and pay costs of £4,714.30.

The 46-year-old pleaded guilty to failing to keep accounting records when he was director of Niki Contractors Ltd at a hearing in February.

Nalivaika, of Leeds, was also disqualified as a company director for seven years in January in separate civil proceedings brought by the Insolvency Service.

Mark Stephens, Chief Investigator at the Insolvency Service, said: “Eugenijus Nalivaika enjoyed the benefits of limited liability while running his business without accepting the responsibilities that come with it.

“Directors must ensure proper records are kept, filed and preserved. This is to protect consumers and other businesses who have dealings with the company.”

Nalivaika was appointed as sole director of Niki Contractors in January 2020. The company had been trading since December 2016 with different directors in charge.

Niki Contractors was wound-up just over a year into Nalivaika’s directorship in May 2021 due to mounting debts.

Investigations by the Insolvency Service revealed Niki Contractors made more than 4,300 payments to 614 people labelled ‘wages’ between April 2020 and January 2021. The total cost of these payments was more than £3.7m.

Niki Contractors also made 106 payments totalling £869,670 to purchase vehicles, mainly older commercial vans, between July 2020 and January 2021.

More than £4.5m was paid to Niki Contractors from other companies in the same period.

Nalivaika failed to explain any of the payments and did not deliver company records to the Insolvency Service or the liquidator when requested.

Niki Contractors was liquidated with liabilities of more than £2.5m and Nalivaika’s breaches have prevented the liquidator from being able to investigate the company’s accounts.