Traders say are taking a ‘moral stand’ against the Business Improvement District set up in Leytonstone in 2008 by refusing to pay its levy.

A number of small business owners have been given until January before further legal action is taken against them for non-payment to the E11 Bid Company.

However, the company is mired in controversy over mismanagement, with evidence of serious financial problems for a number of years and a failure to pay taxes.

Businesses say they have lost faith in the company, which was set up to promote the economy in upper Leytonstone in 2008.

The council, which is responsible for collecting the levy, suspended collections as the financial chaos emerged.

The collections have now resumed and the outstanding tax has been paid, according to E11 Bid.

But some businesses are refusing to pay the fee, claiming the Bid is poorly run under chairman Fawad Shaikh.

Last month, 122 business owners were summoned to Thames Magistrates Court over failing to pay business rates and required fees to the council.

The Guardian understands that up to 92 of these appeared in relation to the E11 Bid levy.

Cases were adjourned until January.

Atif Najab, who runs Top Marks Tuition Centre in High Road, is one of those refusing to pay.

He said: “We are taking a moral stand against the company.”

The Bid company insists it would not had fallen into financial problems had the council collected fees in 2013.

Manager Gianluca Rizzo said: “Over the past few months, 90% of the levy has been collected.”

For more on this story, see next week’s Guardian - out Thursday.