Over 800 company directors banned for abusing Covid support schemes

The Insolvency Service has taken robust action against company directors who misused COVID-19 financial support schemes, banning 831 directors in the 2023-24 financial year. This represents an  increase of over 80% from the previous year. The average director disqualification length for COVID misconduct was a staggering 9.5 years.

Dean Beale, Chief Executive of the Insolvency Service, stated that clamping down on Bounce Back Loan abuse is a top priority. The Service is determined to remove rogue directors who misled the government to receive funds they were not entitled to during the global pandemic.

The COVID Bounce Back Loan Scheme, introduced in 2020, allowed small and medium businesses to borrow up to 25% of their turnover, up to £50,000, with the government as the guarantor. However, some directors exploited the scheme for personal gain rather than supporting their businesses.

Enforcement actions have included winding up companies, criminal convictions, compensation orders, and director disqualifications. Since 2021, a total of 1,430 directors have been banned for abusing COVID support schemes.

Notable cases include Richard Ward, disqualified for 12 years after obtaining £120,000 in Bounce Back Loans for non-existent businesses and transferring £105,000 for personal use. Darrel North, a builder, was also banned for 12 years for inflating his company’s turnover to receive nearly £46,000 more than allowed and transferring most of the £90,000 to his personal account.

The Insolvency Service continues to secure disqualifications, with recent cases involving Muhammad Anas, banned for 6 years after transferring a £50,000 loan to an unconnected company, and Sabine Zogota, disqualified for 11 years for falsely declaring a £200,000 turnover to secure a £50,000 loan for her dormant business.

The Insolvency Service’s crackdown sends a clear message that abusing COVID support schemes will not be tolerated, with severe consequences for those who misused public funds during the pandemic.

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