The Insolvency Service has given Dipak Rao, the former accountant of Deep Purple, an eleven-year ban from serving as a director. The ban follows the revelation that he had misappropriated a minimum of £2 million from the companies who held responsibility for controlling the copyright over many of the rock band’s hit songs.
Rao was discovered to have made a number of payments to his own personal accounts from Deep Purple (Overseas) Ltd and HEC Enterprises Ltd between 2008 and 2014, hiding the transactions by restricting access to bank statements for both companies and excluding them from the financial accounts. Both companies were set up in the 1970s to manage the copyright of Deep Purple’s hits, and subsequently became responsible for the rights of songs by two other bands, Rainbow and Whitesnake, which were formed by Ritchie Blackmore and David Coverdale, former members of the earlier band.
Both companies went into administration in 2016 following Rao’s resignation as director two years earlier. Whilst Rao has confessed to ‘borrowing’ at least £2.27 million, the Insolvency Service has only recovered £477,000 so far. The scheme was only uncovered after Blackmore launched a lawsuit against the companies demanding unpaid royalties of £750,000. The investigation was ‘as clear as it was damning’ according to an inside source, and led to Rao being disqualified from managing or controlling a company without leave of the court until 2028.
“Rao misappropriated company funds causing detriment to the company and its creditors, to his own personal benefit,” said Sue Macleod, chief investigator of the Insolvency Service. She urged company directors to “note from this enforcement result that actions of this kind will lead to serious censure,” adding that Rao’s “disqualification is a reminder to others tempted to do the same that the Insolvency Service will rigorously pursue enforcement action and seek to remove from them for a lengthy period.”
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