Director Disqualification for falsely applying to councils for business grants.
This case was reported by the Insolvency Service (‘IS’) in early September 2024, in which a director received a director disqualification ban of 15 years, the maximum available, for falsely applying for business grants – which were part of the Government’s Covid support scheme – from at least 21 local authorities. It shows the lengths some directors went to in order to illegally take advantage of the various Covid support schemes.
The details of this Director Disqualification case
- Richard Oliver, the sole director Exact Data Trading Co. Ltd managed to obtain a total of £95,000 in Covid business grants, under the Small Business Grant Fund, from local authorities in the summer of 2020 to which his company was not entitled.
- He also provided misleading information to secure a £50,000 Covid Bounce Back Loan
Neil North, Chief Investigator at the Insolvency Service, said:
“Richard Oliver caused his company to deliberately exploit not one, but two support schemes designed to help small businesses during the early days of the Covid pandemic.
We will not tolerate such abuse of public money which is why we sought to remove Oliver from the corporate arena for the longest period possible.
Tackling Covid support scheme abuse is a key priority for the Insolvency Service and this outcome should send a strong warning to other directors that we will take robust action against any misconduct we find.”
Background to the Liquidation of Exact Data Trading Company
When a Liquidator is appointed to a company, they have to submit a report to the Insolvency Service, as to why the company went into liquidation, and whether it was because the directors had failed to carry out their duties. The IS will decide whether there are grounds for a Director Disqualification investigation as a result.
In this case, the Liquidators were appointed in December 2020. The sequence of events that led up to this liquidation were:
- Exact Data was established in September 2019 sourcing equipment and data on behalf of other third-party companies. It operated from Richard Oliver’s home address. 6 months later, the first Covid lockdown started.
- The company applied to at least 21 local authorities in June and July 2020 to be falsely registered for business rates in order to receive Small Business Relief Grants.
- Exact Data did not occupy or trade from any of the premises it falsely claimed to be registered at.
- Richard Oliver supplied contradictory and unsubstantiated information to councils in making the applications. Bank statements and leases signed by Oliver which were provided as supporting documentation appear to have been fraudulently produced, according to Insolvency Service analysis.
- Grant payments worth a combined £95,000 were paid into Exact Data’s bank account by seven local authorities.
- Oliver also secured a £50,000 Covid Bounce Back Loan for Exact Data in June 2020, which the company was not eligible to receive.
- In applying for the loan, Oliver declared that turnover for Exact Data was £220,000 and that his business was trading at the time of the application. However, no trading income was paid into Exact Data’s bank account between the end of March and start of July 2020.
Much of the press reporting over Covid support schemes, and the fraudulent application for and illegal use of has focused on Bounce Back Loans and CBILS. As this case shows, there were other loans and grant schemes that were abused, and directors are being punished for it.
Our Comment
There was probably no other outcome for this director. However, we come across many cases where the liquidation of a company has attracted an IS investigation and yet, upon close examination, we have been able to demonstrate to the satisfaction of the IS that the conduct identified as Unfit Conduct by the IS was not that, once all the facts of the case (many of which were previously unknown to the IS) were drawn to the attention of the IS-context here is everything. As a result, we have helped many directors avoid director disqualification.
Contact us for an initial free of charge discussion if you are being investigated by the Insolvency Service. The sooner we are instructed, the more we can do to help.
