Harby Panesar's company went bust after he lavished a fortune on daughter, Anysha, who is now 19, so she could live her teenage dreams.
He spent £20,000 on a Super Sweet 16 birthday party where Tulisa performed, with a personal video from Hollywood star Nicole Kidman as part of a Moulin Rouge-themed party.
He bought his daughter a Gucci handbag for her birthday, along with a £1,500 personalised mobile phone and a pair of £400 sunglasses.
The 45-year-old then bankrolled her dream to be a top teenage model and beauty queen, and she went on to be crowned America's Perfect Teen, becoming the first international cover girl on SuperModels magazine.
But he got into so much debt, his finance business collapsed. He was warned by the courts not to set up another business – but he defied the orders and was caught and sentenced to nine months in prison.
However, the Appeal Court released the father after Anysha wrote to the judge. Lord Justice Rix allowed the appeal at the Civil Appeal Court and suspended his sentence for two years.
The court was told that he is now 'far removed from his once luxurious life' - and is 'financially ruined and bankrupt.'
Lord Rix said: "The public interest will be sufficiently vindicated by suspending the term."
Panesar made his money through his insurance company Motorcare Warranties which has collapsed.
An investigation by the Financial Services Authority found that the company left a trail of victims whose motor insurance policies were worthless.
A bankruptcy hearing in the High Court banned Panesar from setting up a new business. But Panesar was found in contempt of court by launching up a new insurance company called Motorcare Warranties.
Panesar, 45, and his wife Caroline, 43, now face losing their luxury £500,000 home and their six-acre estate in the Vale of Glamorgan.