Following an Insolvency Service investigation, a Sheffield-based financial advice company which was used to breach a court agreement has been wound up in the High Court. A second linked company was also wound up.

The director of these companies, Nicholas Buchanan, had previously controlled another company called Abacrombie and Co Ltd, which was wound up last year after an earlier investigation by the Service’s Companies Investigation Branch (CIB) found that it had been charging excessive fees, did not have a clear pricing structure, and that there was a lack of commercial benefit to its clients.

While this winding up was pending, Buchanan gave undertakings to the Court not to engage any new clients and to pay any funds received from existing clients into a specified bank account. However, the investigation found that just days after agreeing to these restrictions, he established a new company, Advanced Bankruptcy Recovery Ltd (ABR), to continue the same business.

A further investigation by CIB found that the new company collected £139,000 in fees from new and existing clients and paid them into unrelated bank accounts, including an account held by OPINW Limited, an otherwise dormant company which had previously operated as a property developer.

Both companies failed to produce accounting records to explain expenditure, in particular cash withdrawals of more than £64,000, and various transfers, which were made for the personal benefit of Mr Buchanan.

Insolvency Service chief executive, Stephen Speed, said: "The previous company controlled by this director operated with a complete lack of financial transparency, charging up to £44,000 for its financial services and receiving more than £2 million in fees from its 530 clients. Once action was taken to wind up this company, the director ignored his own undertakings to the High Court and continued the same business under another name.

"The Insolvency Service will take firm action against companies when we find that undertakings given to protect the public and the business community have been breached."

Both ABR and OPINW Limited were wound up in the High Court on the grounds that they operated against the public interest.