Latest case from the Insolvency Service;
Takeaway owner from Oldham and company director from Kings Langley in Hertfordshire falsely claimed Bounce Back Loans totalling around £69,000 before dissolving their companies.
Rukia Begum, 46, from Oldham, and Simon Grant Gorgin, 63, from Kings Langley, have been disqualified for a total of 22 years after each separately claimed tens of thousands of pounds in covid support loans to which their companies were not entitled. Begum was the sole director of New Polash Oldham Ltd, which traded as a takeaway from its incorporation in September 2018 until the company was dissolved in October 2020.
In May 2020, Begum applied for a £35,000 Bounce Back Loan for New Polash, stating that the takeaway’s turnover for 2019 was £154,000. Under the rules of the scheme, companies had to have been trading by 1 March 2020, and be actively trading at the time of the application. Any loan money allocated was to be used for the economic benefit of the business. Two months after receiving the Bounce Back Loan, Begum applied to dissolve the company. She signed the application form, despite this 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 New Polash Oldham Ltd was only entitled to a Bounce Back 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 New Polash Oldham Ltd – a breach of the Companies Act 1986.
In a separate case, Simon Gorgin, applied for a £45,000 Bounce Back Loan for his company, P3 Estates Ltd, in May 2020. Gorgin was sole director of the company, from its incorporation in April 2010 until it was dissolved in December 2021. Yet Gorgin stated on the loan application that P3 Estate’s turnover in 2019 had been £180,000. A loan of £45,000 arrived in the company’s bank account the following day.
But 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 Estate Ltd 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 under the scheme.
They also found that three days after the loan arrived in the company’s account, Gorgin had further breached the rules of the scheme by transferring the full £45,000 to his own bank account. And Gorgin failed to notify the bank from which he had borrowed the money that he had applied to strike off the company – breaching a legal obligation for directors to notify creditors when dissolving their business.
The Secretary of State for Business, Energy and Industrial Strategy accepted disqualification undertakings from the two directors, after both did not dispute that they had caused their companies to receive Bounce Back Loans to which they were not entitled.
Simon Gorgin also did not dispute he had failed to cause his company to falsely apply 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.
Rukia Begum’s disqualification lasts for 10 years and starts on 9 February 2023. Simon Gorgin was banned for 12 years, starting on 5 January 2023. The 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.