Insolvency Service Secures Bankruptcy Restrictions As Part Of Ongoing Work To Tackle Covid Loan Misconduct
8th March 2024
Restrictions have been secured against people who falsely applied for Bounce Back Loans.
Individuals all made false applications, examples of which include overstating the income of their businesses, or in one case, not trading when they received the funds.
Bankruptcy Restrictions Orders (BROs) and Bankruptcy Restrictions Undertakings (BRUs) have been secured by the Insolvency Service
These latest measures form part of the Insolvency Service's ongoing work to target Covid loan abuse.
Six individuals who abused the Bounce Back Loan Scheme have recently had tough bankruptcy restrictions imposed on them as part of the Insolvency Service's efforts to tackle Covid loan misconduct.
The Bankruptcy Restrictions Orders (BROs) and Undertakings (BRUs) secured by the Insolvency Service place significant restrictions on individuals whose conduct has been considered dishonest or blameworthy.
BRUs and BROs prevent individuals from acting as company directors, borrowing more than £500 without declaring their restrictions, and working in various posts in education and the health sector.
So far in 2023-24, the Insolvency Service has secured 757 director disqualifications and 69 bankruptcy restrictions relating to Covid financial support scheme abuse allegations.
Robert Peck, Director of Official Receiver Services at the Insolvency Service, said: "Tackling Bounce Back Loan abuse is a key priority for the Insolvency Service and we will take action against those who applied for these loans giving misleading information during the pandemic.
Bankruptcy Restrictions Orders and Undertakings are a tool available at our disposal to limit the activities of those who have provided false details to obtain credit or who have otherwise acted dishonestly."
As part of the latest cases, Robert King, 37, was handed a 12-year BRO at Bristol County Court on Tuesday 9 January.
King, of Ford Mill Farm, Bampton, Tiverton, Devon, applied for Bounce Back Loans in June and November 2020, falsely claiming he was a sole trader. He was declared bankrupt in August 2022.
Later in January 2024, Abdullah Khan, formerly known as Imran Khan, 32, was given a 10-year BRO.
Khan, of Norrel's Croft, Rotherham, obtained a £50,000 loan in June 2020 for his AK Courier Services business.
However, he overstated the turnover of his business, claiming it was £203,000 and received at least £36,000 more than he was entitled to.
Khan appeared at the County Court in Leeds on Tuesday 30 January where he was handed the BRO. He was declared bankrupt in March 2022.
A number of BRUs were also secured by the Insolvency Service across January and February.
Lee Smith, 38, of Milford Way, South Milford, North Yorkshire, accepted an 11-year BRU which came into effect on Wednesday 10 January.
Smith received at least £29,000 more than he should have done for his Supplement King business. He applied for the £50,000 Bounce Back Loan in May 2020. He was declared bankrupt in April 2023.
Wayne Hillier, 46, of Ward Terrace, Wolsingham, County Durham, also entered into an 11-year BRU starting on Thursday 18 January.
Hillier applied for a £50,000 Bounce Back Loan in May 2020, overstating his income by over £135,000.
His Wayne Hillier Roofing business was only entitled to just over £15,000. Hillier was declared bankrupt in June 2023.
Florita Popa, 57, of Gateway Court, St Albans, accepted a nine-year BRU on Friday 8 February.
Popa applied for a £23,250 Bounce Back Loan in June 2020 even though she was not trading as required by the terms of the scheme. She was declared bankrupt in March 2023.
Zbigniew Majewski accepted a 12-year BRU which came into force on Wednesday 28 February.
Majewski secured two £50,000 Bounce Back Loans in July and December 2020 for his Zack the Gardener business, breaking the rules of the scheme which permitted only one loan for a company.
The 72-year-old, of Perryn Road, London, was also declared bankrupt in March 2023.
None of the individuals listed above are connected in any way.
BRO and BRU restrictions prevent individuals from:
Acting as a director of a company, or forming, managing or promoting a company, without permission from the court
Carrying on business under a different name without telling people you do business with the name (or trading style) in which you were made bankrupt .
Trying to borrow more than £500 without saying you are subject to restrictions .
Being a trustee of a charity or many pension schemes
Working in various posts in education or the health industry
Holding posts in some public authorities, or in similar organisations.
Further guidance about Bankruptcy Restrictions Orders and Undertakings
https://www.gov.uk/government/publications/bankruptcy-restrictions-orders-and-undertakings/bankruptcy-restrictions-orders-and-undertakings
Details of BRO and BRU restrictions relating to individuals can be found on the Individual Insolvency Register
https://www.insolvencydirect.bis.gov.uk/eiir/
Comment
It may have seemed like easy money as almost no checks were carried out on applications but signing that your information was true is now coming home to roost for many many business people who lied on their forms. Many more case are still being investigated and it may take years before most are taken up but the clock keeps ticking.
