A Blackburn man has been hit with a six year ban after allowing his firm to claim a £50,000 Covid support loan it was never entitled to.
Western was knocked back for a Coronavirus Business Interruption Loan Scheme but managed to claim the maximum £50,000 from the Bounce Back Loan scheme which was set up to help small and medium sized firm survive disruption caused by the pandemic. By the time the company went bust with £280k, it had failed to pay back a single penny of the BBL.An investigation was launched by the Insolvency Service and concluded with two men being given six year bans from running businesses.
Cornlelius Kleyhans, of City Road, Islington, was the other director to be given a ban for his involvement in Western Isles. According to the Insolvency Service, both men breached their duties by allowing the firm to apply for BBL despite not being entitled. It found that after the efforts to wind down the firm in August 2019, no trading income was received in the following six months but during that period an application was made for the Coronavirus Business Interruption Loan Scheme.
That money was received on May 5, 2020, and over the coming months, £41,000 was transferred to connected company's despite strict rules on the funds only being used for the benefit of the business applying. No other trading income was received by December 8, 2020 when a winding order was issued.