In the article published on this website entitled ‘Director Disqualification | Proposed Changes’, we outlined the contents of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill noting that ‘directors of companies that improperly received ‘‘bounce back’’ loans introduced at the commencement of the COVID-19 crisis could be the first targets.’
This expectation soon came to fruition as shown in an Insolvency Service Press Release dated 15 November 2021 upon which Helen Holder of Kangs Solicitors now comments.
The team at Kangs Solicitors has vast experience and is highly regarded nationwide for assisting clients facing allegations of wrongdoing of every nature, including those involving breaches of company law, Director Disqualification, Insolvency and Bankruptcy.
Our team is led by Hamraj Kang who is recognised as a leading expert in the area of company fraud matters. He is one of only two solicitors nationally to be ranked as a ‘star individual’ for six consecutive years in the legal directory Chambers & Partners.
Other members of the team are ranked in the Legal 500 and also ranked in Chambers & Partners.
For an initial no obligation discussion, please call our Team at any of our offices detailed below:
‘Bounce Back’ Loans | Requirements | Kangs Financial Fraud Defence Solicitors
- It is a requirement that all directors of a company ensure it maintains proper accounting records.
- A ‘Bounce Back’ Loan must only be used for the benefit of the business in which the company engages and never for personal use.
- Failure to properly account for the business activity for which the loan was used and using it for personal expenditure can result in Director Disqualification Proceedings or the extension of bankruptcy restrictions.
The Insolvency Service Press Release | Kangs Insolvency Solicitors
- Between 2019 and 2020, Muneef Ihsan was the director of three companies which were all registered to the same residential address and all placed into voluntary liquidation in September 2020.
- Upon investigation, The Insolvency Service found that Ihsan had opened a bank account for each company in June 2020 for the sole purpose of receiving three ‘Bounce Back’ loans of fifty thousand pounds each.
- The Insolvency Service discovered substantial cash withdrawals and transfers to a company controlled by, amongst others, Mahir Towid Ul Haque who had been appointed director of Hiitness Ltd in May 2020 and which was placed into voluntary liquidation in November 2020.
- The Insolvency Service discovered that this company had also received the sum of fifty thousand pounds by way of a ‘Bounce Back’ Loan.
- The Insolvency Service established that there was no evidence that any of the companies associated with Ihsan and Ul Haque had traded, they were not eligible for the loans which had not been used for the benefit of the companies but for personal expenditure.
- The Secretary of State accepted Disqualification Undertakings from both directors. Ihsan was banned for a period of thirteen years and Ul Haque for six years thereby preventing them from directly or indirectly being involved in the promotion, formation or management of a company without the permission of the court.
Robert Clarke, Chief Investigator for the Insolvency Service, said:
‘Abuse of Covid-19 support schemes, which have provided essential financial assistance to millions by helping businesses trade during the pandemic and protecting jobs, cannot be tolerated.
The Insolvency Service has sent out a clear message that where a company is being used to facilitate fraudulent activity, action will be taken to remove the directors from the corporate arena for a lengthy period of time.’
Who Can I Contact for Advice & Help? | Bounce Back Loans Fraud Defence Solicitors
If you are subject to, or anticipate:
- an investigation by the Insolvency Service,
- Bankruptcy Proceedings,
- Director Disqualification Proceedings or
- Criminal fraud investigation involving any company involvement you have had
Please do not hesitate to contact the Team at Kangs Solicitors through any of the following who will be pleased to speak to you: