As you will be aware, I track the number of individual Bounce Back Loans that have been blagged or misused by Company Directors, and Sole Traders and that information is updated daily.
Obviously, as some Directors/Sole Traders blagged or in some cases robbed more than one BBL, as of Friday the 12th of April 2024 I had tracked 2166 BBLs Worth £89,037,771.91.
You can discover the full details of each individual case in this section of the website >
https://mrbounceback.com/category/the-disqualification-files/
Today, the Insolvency Service has released the following statement, as an update.
Tough action taken against directors to tackle Covid loan misconduct
- A total of 831 company directors were banned in 2023-24 for Covid support scheme abuse, up more than 80% on the previous year
- The average length of director disqualification for Covid misconduct in 2023-24 was almost 10 years
More than 800 company directors have been disqualified for abusing Covid support schemes following investigations by the Insolvency Service.
During 2023-24, a total of 831 directors were banned for Covid financial support scheme misconduct, with an average disqualification length of more than nine-and-a-half years.
Dean Beale, Chief Executive at the Insolvency Service, said:
“Tackling Bounce Back Loan misconduct is a key priority for the Insolvency Service and we are determined to use all our available powers to remove rogue company directors from the corporate arena.
It is important the Insolvency Service is taking such robust action to clamp down on directors who abused Covid support schemes and took from the public purse during the worst global pandemic for 100 years.
We have teams dedicated solely to investigating Bounce Back Loan misconduct that are committed to taking action against those who provided misleading information to receive money they were not entitled to.”
The Bounce Back Loan Scheme
The Covid Bounce Back Loan Scheme was introduced at the start of the pandemic in 2020. It helped small and medium-sized businesses borrow between £2,000 and £50,000 at a low interest rate, guaranteed by the government.
Businesses were entitled to a single loan of up to 25% of their turnover under the scheme.
Individuals could only use the loans for the economic benefit of the business and not for personal purposes.
Enforcement action taken against those that have abused the support schemes has ranged from companies being wound-up in court to criminal convictions, compensation orders and director disqualifications.
The Insolvency Service has successfully applied to have 1,430 directors banned for abusing Covid support schemes since it started investigating potential financial wrongdoing in this area in 2021.
Highlighted Case 1 – Richard Ward
Directors banned for Covid loan abuse in 2023-24 included Richard Ward, who signed a 12-year disqualification undertaking in June 2023.
Ward, 42, of North Cross Road, Huddersfield, applied for three Bounce Back Loans worth a combined £120,000 in the summer of 2020 on behalf of Colt House Event Management Ltd, Colt House Developers Ltd, and Colt House Bloodstock Ltd.
He claimed the companies ran corporate hospitality golf events, developed a large residential property in Huddersfield and purchased foals for future sale.
However, investigations by the Insolvency Service revealed none of the companies had any income in their bank accounts before receiving the loans.
Ward also transferred at least £105,000 of the funds to his own account for his personal use.
Highlighted Case 2 – Darrel North
Builder Darrel North was also banned as a director for 12 years after signing a disqualification undertaking in November 2023.
North, of Bellhurst Road, Robertsbridge, East Sussex, obtained a £48,000 Bounce Back Loan in May 2020, which was topped up to the maximum £50,000 in November of that year for his D W Trading (South East) Limited business.
D W Trading was a construction company specialising in domestic renovations.
North was only allowed a single loan and substantially inflated the turnover of his company, receiving almost £46,000 more than he was entitled to.
The 42-year-old ignored the rules of the scheme further when he secured a separate £40,000 Bounce Back Loan from another bank in May 2020.
Nearly £80,000 of the £90,000 was transferred to North’s personal bank account with no evidence that he used the funds for the economic benefit of the business.
Director disqualifications for Bounce Back Loan misconduct continue to be secured by the Insolvency Service, with many already having come into effect in the 2024-25 financial year.
Highlighted Case 3 – Muhammad Anas
Muhammad Anas, 24, accepted a six-year disqualification undertaking which started on Tuesday 2 April.
Anas, of Mamore Place, Glasgow, was the director of internet and mail order sales firm TAA Clerical Services Limited.
The company successfully applied for the maximum £50,000 loan in June 2020.
In the same month, the funds were transferred to an unconnected company.
Anas failed to provide an explanation for this transfer despite requests from the Insolvency Service.
Highlighted Case 4 – Sabine Zogota
In a separate case, Sabine Zogota signed an 11-year disqualification undertaking also starting on Tuesday 2 April after breaching the scheme.
The 34-year-old of Hungerford Square, Weybridge, was the director of Bespoke Surrey Ltd which offered interior design and fitting services.
However, a review of the company’s end-of-year accounts in March 2020 and 2021 revealed it was dormant.
Despite this, Zogota declared an estimated turnover of £200,000 to secure a £50,000 Bounce Back Loan in September 2020.
The loan was not used for the economic benefit of the business.
The Insolvency Service secured 459 director disqualifications for Covid support scheme abuse in 2022-23, and 140 in 2021-22, the first year after the Bounce Back Loan Scheme closed to new applicants.
Further information
- Richard Ward is of North Cross Road, Huddersfield. His date of birth is 16 September 1981
- Darrel North is of Bellhurst Road, Robertsbridge, East Sussex. His date of birth is 18 January 1982
- Muhammad Anas is of Mamore Place, Glasgow. His date of birth is 24 May 1999
- Sabine Zogota is of Hungerford Square, Weybridge, Surrey. Her date of birth is 14 June 1989