Seven-year ban for director who abused two Covid support schemes
A director of a company that recruited staff for care homes has been disqualified for seven years after unlawfully taking out £150,000 in Covid support loans and failing to show the money was invested in his business.
James Ireri, 44, from Surrey, abused two different Covid loan schemes during the pandemic while a director of Safi Care, which went into liquidation in August 2021. The company had first traded as Safi Services until March 2016.
In May 2020, Ireri applied for a £50,000 bounce back loan – the maximum amount allowable.
Bounce back loans were introduced to help microbusinesses during the pandemic and are fully underwritten by the government.
Read more: Directors banned for 17 years for abusing Covid loan scheme
In August 2020, Ireri applied for another loan of £100,000 on behalf of Safi Care, this time from a different lender, and through a different Covid support scheme, the coronavirus business interruption loan scheme (CBILS).
CBILS loans were designed for slightly larger businesses and ranged between £50,000 and £5m. 80 per cent of the loan’s value was guaranteed by the government.
Under the rules of the Covid loan schemes, eligible businesses were able to apply for a single loan under one or the other of the schemes but not both, unless the second loan was used to repay the first in full.
But when Safi Care went into liquidation it owed more than £231,500, including the full amount of both loans.
During an Insolvency Service investigation Ireri failed to provide adequate company accounts and investigators were unable to determine whether Safi Care had ever been eligible to apply for the initial bounce back loan, based on the company’s 2019 turnover.
Read more: Two company directors banned for bounce back loan fraud
The lack of company books also meant that Ireri was unable to prove that he had used the loan money for the economic support of the business – another condition of the scheme.
Ireri’s ban started on 8 December 2022, and lasts for seven years. The disqualification prevents him from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.
“Bounce back loans and Covid business interruption loans were designed to provide vital support for viable businesses through the pandemic,” said Neil North, deputy head of investigation at the Insolvency Service.
“James Ireri abused not one, but two of these schemes.
“His ban should serve as a warning to other directors who misuse financial support available to companies that the Insolvency Service is able to bring your actions to account and remove you from the corporate arena.”
Read more: Covid loan abuse strike-offs double in a year