Towards the end of1979 Gus learned that there was a large amount of money (£472,000) that his companies owed to the Inland Revenue and the DHSS. This was discovered to be made up of amounts that his accountant Keith Moore had deducted to pay income tax and national insurance but had not paid to the Inland Revenue and DHSS.
There evolved a plan to keep Gus's businesses (including Kittiwake Productions and Moonlight Recordings Ltd) running whilst paying off the money due and this was negotiated and agreed. For some unknown reason, Keith Moore then omitted to pay the first installment.
Meanwhile in a separate case, the VAT inspectors sent a claim in to Moonlight Recordings Ltd for £3,000 to be paid with the threat that if not paid then winding up proceedings would start. This letter was filed away and ignored, with the result that a couple of weeks later the VAT inspectors duly applied for a winding up order in The London Gazette. When this notice appeared, HMRC immediately joined the creditors and Moonlight Recordings Ltd together with Gus's other companies were put in receivership on 29th February 1980.
It was discovered as these events progressed that Keith Moore was no stranger to accountancy problems. In 1974 his property development company was compulsorily wound up in the High Court after the Official Receiver blamed keith Moore for "speculative property development with insufficient capital". In 1976/77 the Inland Revenue pursued a claim against him for £15,872 and it is unknown if this was ever paid. In September 1979 the Institute of Chartered Accountants found Moore guilty of misconduct and fined him £250, which was not paid and he was struck off as a result, although he was re-instated on March 1980 when he paid the fine.
As a conclusion to the winding up of Gus's companies, The Mill was sold in the summer of 1980 to Jimmy Page of Led Zeppelin, who also took on the two remaining staff - myself and Stuart Epps.
Gus did not pursue Keith Moore with any legal action following these events, but many years later Sting pressed criminal charges and Keith Moore was eventually jailed for six years in 1995 for swindling Sting out of £6m.
Readers may be interested in the following book whose details I recently discovered online:
"Coping with stress in the fields of Accounting & Finance" by Keith J Moore, published in 1986, B00072939A
I have not found a copy yet but given the background information above, it should make interesting reading. Possibly re-print is in order.
(I am indebted to journalist Jack Lundin for providing me with the details of his original Observer article of 22nd March 1981 which covered these business problems so thoroughly and allowing me to include them here.)