Edinburgh-based Wangping Travel Ltd will have its licence revoked from midnight on July 31 after the Deputy Traffic Commissioner for Scotland ruled it was "incapable of compliant operation".
The company is Scotland's oldest and largest Chinese travel agent, described on the VisitScotland website as offering "first class travel services" and a "one stop shop" for Chinese holidaymakers seeking everything from coach tours to hotel bookings.
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However, the firm was called to a public inquiry in Edinburgh after a routine police check alerted the authorities to widespread malpractice.
Officers had stopped a Wangping coach near Edinburgh Airport on June 20 last year after noticing that its sole passenger, a translator, was not wearing a seat belt. The police subsequently seized the vehicle after discovering the driver was working despite a restriction on his licence that barred him from driving "for hire or reward", therefore invalidating the vehicle's insurance. His passenger carrying vehicle licence has now been revoked and he has been disqualified from holding one again for 12 months.
An investigation at Wangping Travel's premises in Dalry Road, Edinburgh, revealed that hundreds of record sheets noting the hours worked by the company's drivers dating back to 2009 were kept in a plastic bag in a filing cabinet where they were "just thrown in, not organised".
Officers were unable to trace all of the drivers in the records because it was "impossible to decipher the names of the drivers on the records or to marry them up with the list of drivers employed by the operator".
It emerged one driver employed by the firm was only licensed to operate vehicles with automatic transmission, but the coaches owned by Wangping Travel all had manual gearboxes. This would invalidate the vehicles' insurance. His licence was suspended for 12 weeks.
Records could not be found for a third driver but it emerged he also had a restriction on his licence barring him from driving "for hire or reward". His licence was also suspended for eight weeks.
The inquiry heard the company's director, Jie Song, was "naive about the employment of drivers". It also heard she had previously been called before the Traffic Commissioner in 2013 over safety concerns after luggage was found blocking an emergency exit on a Wangping coach. Ms Song has been disqualified from holding an operator's licence for nine months.
Simon Evans, Deputy Traffic Commissioner for Scotland, said Wangping Travel had set a "dreadful example" that risked undermining confidence in the entire public service vehicle trade. No-one from the firm was available for comment.