Muhammad Arif, 57, of Uxbridge, has been subjected to 10 years of bankruptcy restrictions for wrongfully claiming a £50,000 Bounce Back Loan.
From April 2012 until his bankruptcy in December 2021, Arif ran a clothing wholesale firm in west London under the name Ayesha Boutique.
In June 2020, he submitted an application for a Bounce Back Loan, indicating that his previous year’s revenue was £219,000.
The government created Bounce Back Loans to assist companies in surviving the Covid-19 outbreak. Businesses might apply for loans ranging from £2,000 to £50,000, or up to 25% of their 2019 revenue.
However, Arif subsequently filed for bankruptcy and was declared bankrupt in December 2021, owing over £56,200 and prompting an inquiry by the Insolvency Service. The inquiry revealed that Arif’s real revenue for 2019 was $21,604, which is around ten times less than he declared in his application.
Arif informed investigators that around £34,200 of the £50,000 loan was utilised to pay a supplier, including approximately £19,000 for gold purchases and approximately £8,900 in cash withdrawals. Additionally, he said that more than £15,500 had been given to family members to settle creditors.
The Official Receiver is continuing her investigation into the payments made to Arif’s family, but has been unable to corroborate his explanation for the remaining payments.
According to the terms of the Bounce Back Loan programme, the funds were to be utilised for the economic advantage of the firm. However, the Official Receiver was unable to identify whether any of the £50,000 loan was used to assist Ayesha Boutique.
The Secretary of State for Business, Energy, and Industrial Strategy approved Muhammad Arif’s Bankruptcy Restrictions Undertaking on November 11, 2022, for a period of ten years.
Official Receiver at the Insolvency Service, Mitzi Mace, said:
“This scheme was specifically set up to support existing viable businesses through a challenging economic period and not for individuals’ personal benefit.
“Muhammad Arif’s actions have led to losses to taxpayers while he has enjoyed the benefit of £50,000 to which he was not fully entitled.”