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Insolvency Service winds up businesses abusing Covid support

The Insolvency Service has announced it has disqualified a director and wound-up five other companies following fraudulent claims for Covid-related business support.

The director, based in Birmingham, was disqualified after fraudulently claiming £50,000 through the Bounce Back Loan Scheme. They then transferred the full amount out of the account of the firm to themselves before it went into administration.

Despite the company accounts being frozen after it was confirmed the business was to be shut down, the director then forged a document to convince their bank that the winding up order had been revoked. This allowed them to transfer around £70,000 out of the account, which they had secured less than two weeks previously.

In addition to this, the Insolvency Service has successfully petitioned the courts to wind up five limited companies that have been involved in abusing government loans since February 2021. This included a furniture retailer in Manchester and two Glasgow-based companies for which no legitimate business activity was identified since at least January 2020.

Two of the companies secured Bounce Back Loans, with at least one procuring this on the basis of false information. Additionally, one of the Glasgow-based firms secured two Coronavirus Business Interruption Loans totalling £240,000 on the basis of false information.

The Insolvency Service’s chief investigator Dave Elliott said: “The Bounce Back Loan scheme was made available to help support businesses during the pandemic. It is outrageous that some directors have been trying to abuse this support, and the action we have taken shows we take this issue extremely seriously.

“I urge anyone who suspects a company has been involved in this kind of abuse, or has information about directors fraudulently obtaining Covid business support, to alert us immediately.”

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