A man has been banned from acting as a company director for 10 years after breaching the rules of a scheme designed to support businesses during the COVID-19 pandemic.
The man, who was the sole director of a construction company, applied in 2020 for a £50,000 Bounce Back Loan for the company. The Bounce Back Loan scheme allowed companies to borrow between £2,000 and 25 per cent of their turnover, up to a maximum of £50,000, at low rates of interest. For companies that began trading before 2019, the relevant turnover was that in the 2019 calendar year. The director stated on the loan application that the company's turnover in 2019 was £205,410.
After the company went into liquidation in 2022, still owing the full amount of the loan, the Insolvency Service conducted an investigation. It was established that the company's turnover had in fact been about £82,900 in 2019 and it had therefore received nearly two and a half times the amount it was entitled to. The investigation also revealed that, five days after the company received the loan in July 2020, the director had begun to move money into his personal bank account, transferring more than £35,000 by April 2021. Investigators found no evidence that these funds had been used for the benefit of the company as required under the terms of the scheme.
The Secretary of State for Business and Trade accepted a 10-year disqualification undertaking from the director. This prevents him from being involved in the formation, management or promotion of a company without court permission until 1 May 2034.