The four directors lost their eligibility when they all obtained bounce-back loans before liquidating their businesses in order to avoid having to repay their debts.
In the most recent instance, Sirfraz Ahmad, a Leeds resident, was disqualified for 10 years after inflating his turnover to obtain an unauthorised higher value bounce back loan.
Sirfraz Ahmad wasted $25,000 to pay back family members rather than using the government-backed loan to assist the company, Food Box Leeds Limited.
Max Hadley, Lewis Wright, and Jake Joynt have joined Sirfraz Ahmad on the disqualification register after the Insolvency Service used new authority to deal with dishonest directors who dissolve companies in order to avoid paying their debts.
The Insolvency Service has the authority to look into the directors of businesses that go into administration or liquidation, two forms of insolvency.
Where there is evidence of misconduct, the Insolvency Service may also be directed to investigate active corporations.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Firms) Act, signed into law in December 2021, expands the Insolvency Service’s investigative authority to include directors of disbanded companies on behalf of the Business Secretary.
If misbehaviour is discovered, directors may be subject to fines such as a 15-year suspension from serving as a corporate director or, in the most severe circumstances, criminal prosecution.
Lord Callanan, a minister for business:
Unprecedented government assistance was given to businesses to help them weather the pandemic, but sadly a small number of people misused this assistance for their own benefit.
We have made it abundantly clear that we will not stand for those who attempt to defraud the taxpayer, which is why we passed strict new legislation giving the Insolvency Service the ability to oust directors from their positions for dissolving their businesses in order to avoid paying back their bounce-back loans.
Lewis Wright, a consultant, obtained a £50,000 loan in June 2020 despite the fact that his company had ceased operations the year before.
Lewis Wright overstated his turnover before paying himself just over £47,000, and he then collected the maximum loan amount.
He loses his eligibility for 12 years.
Max Hadley, the director of Prestige Building Works and a railway engineer, was given a 10-year suspension after obtaining a £20,000 bounce-back loan and using $18,000 of it for expenses unrelated to the construction company.
Jake Joynt also received a 7-year suspension after taking out a £15,000 bounce-back loan and using $13,000 of it for personal expenses.
Without the court’s approval, none of the four directors may participate directly or indirectly in the development, establishment, or management of a corporation.
The Insolvency Service is considering utilising its legal authority to pursue Compensation Orders against the directors if necessary in order to recover the bounce back loan funds.