Not Using Their Company’s NatWest Bounce Back Loan in Full For the Benefit of the Business and Instead Splashing Out on New Cars Not Listed as Company Assets Sees Co-Directors Being Given 6 Year Disqualifications

Having taken the Insolvency route with a £50k Bounce Back Loan still owing, it was discovered that the Co-Directors named below had splashed out on two new cars, which were not listed as Company assets.

6 Year Disqualification

Call Now

In May 2020 Jeffrey Keegan “Mr Keegan” caused or allowed JMCLK Limited to apply for and obtain a government-backed BBL from NatWest (“the BBL lender”) of £50,000 (‘the loan monies’) by providing, or allowing to be provided, inaccurate information as to its solvency in 2019 and did not use all the loan monies for the economic benefit of JMCLK, contrary to the terms of the loan.

These actions constituted a misuse of the Covid business support finance scheme.

In that:

Application – Criteria and Mis-Statements

  • In submitting JMCLK’s BBL application, his co-director declared on JMCLK’s behalf that the company had not shown net liabilities in its 2019 accounts.
  • According to JMCLK’s financial statements for the year to 30 June 2019, the company had net current and total liabilities of £46,216 and £18,092 respectively.

Misuse of monies obtained contrary to terms of BBL

  • JMCLK’s current business account had an overdrawn balance of £1,980 immediately prior to receipt of the loan monies of £50,000 on 11 May 2020.

The loan monies were not applied in full for the benefit of the Company.

In that:

  • On 14 May 2020 a transfer of £50,000 was made from the current business account to a business reserve account held by the company and, on 19 May 2020, from there to a second and new business reserve account which was opened with the £50,000 so transferred.
  • From the second business reserve account a payment of £9,000 was made to a third party on 11 June 2020 in respect of a car purchased for him and/or for Co-Director and which did not become an asset of the company.
  • From the second business reserve account a transfer back to the current business account was made on 17 July 2020 in the sum of £18,300 which on that same day was paid out to a car dealer in respect of a vehicle not purchased for JMCLK but for him.
  • At the time of the transfer of this £18,300 to the current business account, the balance on the current business account was £351.90.

The Statement of Affairs signed by his co-director on 30 April 2021 shows the BBL lender as a creditor for the full value of the loan monies i.e. £50,000.

6 Year Disqualification

In May 2020 Michaela Keegan “Mrs Keegan” caused JMCLK Limited to apply for and obtain a government-backed Bounce Back Loan from NatWest (“the BBL lender”) of £50,000 (‘the loan monies’) by providing inaccurate information as to JMCLK’s solvency in 2019 and did not use all the loan monies for the economic benefit of JMCLK, contrary to the terms of the loan.

These actions constituted a misuse of the Covid business support finance scheme.

In that:

Application – Criteria and Miss-Statements

  • In submitting JMCLK’s BBL application, she declared on its behalf that the company had not shown net liabilities in its 2019 accounts.
  • According to JMCLK’s financial statements for the year to 30 June 2019, the company had net current and total liabilities of £46,216 and £18,092 respectively.

Misuse of monies obtained contrary to terms of BBL

  • JMCLK’s current business account had an overdrawn balance of £1,980 immediately prior to receipt of the loan monies of £50,000 on 11 May 2020.

The loan monies were not applied in full for the benefit of the Company.

In that:

  • On 14 May 2020 a transfer of £50,000 was made from the current business account to a business reserve account held by the company and, on 19 May 2020, from there to a second and new business reserve account which was opened with the £50,000 so transferred.
  • From the second business reserve account a payment of £9,000 was made to a third party on 11 June 2020 in respect of a car purchased for her and/or for Co-Director and which did not become an asset of the company.
  • From the second business reserve account a transfer back to the current business account was made on 17 July 2020 in the sum of £18,300 which on that same day was paid out to a car dealer in respect of a vehicle not purchased for JMCLK.
  • At the time of the transfer of this £18,300 to the current business account, the balance on the current business account was £351.90.

The Statement of Affairs signed by her on 30 April 2021 shows the BBL lender as a creditor for the full value of the loan monies i.e. £50,000.