Two company directors banned for bounce back loan fraud
A takeaway owner and a company director have separately been disqualified for a total of 22 years after falsely claiming tens of thousands of pounds in Covid support loans.
Rukia Begum was the sole director of takeaway New Polash in Oldham, which was incorporated in September 2018 until the company was dissolved in October 2020.
Simon Gorgin was sole director of P3 Estates, from its incorporation in April 2010 until it was dissolved in December 2021.
Begum’s disqualification lasts for 10 years and starts on 9 February 2023. Gorgin was banned for 12 years, starting on 5 January 2023.
In May 2020, Begum applied for a £35,000 bounce back loan, stating that her takeaway’s turnover for 2019 was £154,000.
Two months after receiving the loan, Begum applied to dissolve the company. She signed the application form, despite it stating that a failure to notify any creditors was an offence.
When the Insolvency Service began its investigation in July 2020, the company owed the full amount of the loan.
Investigators found that Begum had exaggerated the turnover of her company by around £110,400, and that the business was only entitled to a loan of around £11,000 based on the takeaway’s actual turnover.
She had also allowed the takeaway to continue trading in the three months before her application to dissolve it – a breach of the Companies Act 1986.
Read more: Three directors banned for Bounce Back Loan abuse
Separately, Gorgin applied for a £45,000 bounce back loan for his company in May 2020.
He stated on the loan application that P3 Estates’ turnover in 2019 had been £180,000. A loan of £45,000 arrived in the company’s bank account the following day.
However, a month earlier, in April 2021 he had applied to dissolve the company and by July of the same year P3 Estates still owed the full amount of the loan, prompting an investigation by the Insolvency Service.
Investigators discovered that P3 Estates had never traded and had not been trading at the time of the loan application and so had not been entitled to receive any money.
They also found that three days after the loan arrived in the company’s account, Gorgin had further breached the rules by transferring the full £45,000 to his own bank account.
He also failed to notify the bank from which he had borrowed the money that he had applied to strike off the company – a further breach.
Read more: Two directors disqualified for BBL fraud
Neither disputed that they had received loans they were not entitled to. Gorgin also did not dispute he had falsely applied for a bounce back loan when it was not actively trading, failed to ensure the money was used for the economic benefit of the business and failed to give the required notice to the bank of the dissolution of his business.
Their disqualifications prevent them from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court. A compensation order is being recommended to recover the money from both directors.
“Rukia Begum and Simon Gorgin abused the scheme and took taxpayers’ money at a time when many businesses were in genuine need,” said Insolvency Service deputy head of dissolved company investigations Peter Smith.
“Their lengthy bans should stand as a warning that we will take action against directors who abuse government support schemes.”
Read more: Bounce back loan borrowers could have names made public