Administrators of PARS Technology reckon an unpaid VAT claim against HMRC for nearly £2.5m and a weak trading environment caused its recent collapse.
As revealed by MicroScope, the UK system builder was placed in the hands of Rendle & Co at the end of last week after exhausting attempts to find potential investors or a buyer for the firm.
The issues with HMRC erupted in 2006 when it accused PARS of being part of a VAT carousel on CPUs and withheld input tax totalling £2.48m.
Following appeals from the Milton Keynes-based firm, the case came to a head in December 2010 when a tribunal concluded that HMRC was not liable to pay out the money.
The decision document revealed PARS CEO Farhad Kazeroonian saw his salary rise from nearly £60,000 in 2003 to £221,000 the following year, £350,000 in 2005 and £1.28m in 2006 as company profits swelled.
"We do not believe that the fraudsters [in the carousel] would have allowed PARS to realise such large profits if PARS were not 'in the know' about the fraud. We find PARS did know of the fraud," it stated.
Richard Rendle, owner of the Birmingham-based administrator, said: "Trade was pretty bad but when someone takes away your finance it limits your ability to manoeuvre."
Only yesterday Kazeroonian expressed his interest in buying PARS from the administrators but Rendle revealed he was talking to more than one suitor.
"Something will happen fairly quickly, it's a delicate situation and when you try to sell a business you try to sell it sooner rather than later because that maximises the business for all involved," said Rendle.
"PARS has a loyal customer base, employees and suppliers and they are all waiting for this decision," he added.
Last November, the business made one third of its workforce redundant leaving around 20 heads in place. Rendle confirmed that he had let go 10 staff when appointed as administrator.
PARS Technology has now confirmed it is appealing against the court's ruling.