Two borrowers hit with restrictions after Covid loan abuse
The Insolvency Service has cracked down on two borrowers who falsely applied for bounce back loans, which were launched during the coronavirus outbreak to help small- and medium-sized businesses.
The two businesses, a gym operator and roofer, run by Junaid Dar and David Michael Godderidge, respectively, applied for nearly £60,000 combined.
The Insolvency Service said it has been investigating Dar’s conduct since July 2021, when his company entered into liquidation. The business, JDarPT, first received a loan of £13,000 in May 2020. However, Dar applied again for additional loans and received a total of £32,500 from the bounce back loan scheme that he was not entitled to.
He has been banned from running companies for 11 years, effective from 27 April 2022.
In Godderidge’s case, the Official Receiver uncovered that he had provided incorrect information to obtain a bounce back loan “far greater” than he was entitled to. The Official Receiver was assessing Godderidge’s assets at the time to make payments to creditors following his bankruptcy in October 2021.
It was discovered that Godderidge had someone else make the loan application with inflated turnover figures, and gambled away the £13,000 he received in just three weeks. He has been banned from acting as a director or manager of a company for seven years.
“Bounce Back Loans were made available for trading businesses adversely affected by the pandemic and were issued based on accurate financial statements,” said Sue Macleod for the Insolvency Service.
“Both Junaid Dar and David Godderidge cynically applied for loans far greater than they were entitled to and clearly thought they could get away it.”
Read more: Labour hits out at government handling of covid loan fraud
More than £47bn was lent by banks under the bounce back loan scheme, which was fully guaranteed by the government for loans up to £50,000. The Department for Business, Energy and Industrial Strategy previously estimated that loans worth £4.9bn were fraudulent.
Read more: Tory Lord defends government’s handling of Covid loan fraud
This is not the first time the Insolvency Service has taken action against a business owner in relation to bounce back loans. Last month it disqualified a mobile mechanic, who received £40,000 that he was not entitled to.
In the case of Dar and Godderidge, the liquidator and trustee in bankruptcy are assessing whether they can repay the funds.
Read more: Covid loans fraudulently used to buy houses, cars, and pornography
