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Director avoids Director Disqualification and a Compensation Order for alleged Bounce Back Loan Fraud

Allegations against company Directors for the alleged misuse of BBLs are not always straightforward, as in this case, where we convinced the Insolvency Service to drop their investigation

Government figures show that over £47 billion was drawn down in Bounce Back Loans (BBLs) during the Pandemic. It is estimated by the Public Accounts Committee, however, that £4.9bn of that total was lost to fraud, while another £12bn has been lost via the scheme mainly through businesses collapsing during the pandemic. With the recent news that the first prison sentence for a director to BE convicted of BBL fraud has now happened, it is clear that the Government, through the Insolvency Service (IS), has considerable powers to punish unfit directors, and we expect to see many more custodial sentences in the coming months and years for this offence. However, as this testimonial shows, the alleged misuse of BBL funds, or any other form of Covid Loan for that matter, is not always straightforward. In this case, our Director Disqualification Specialists were able to convince the IS to drop their investigation by introducing them to the full facts of the case.

Our client takes up the story

“After putting my company, which I was proud of and had built up over several years, into a Creditors’ voluntary liquidation, as advised by a Liquidator, I thought that that was the end of matters.

That could not have been further from the truth.  I soon received a letter from the Insolvency Service threatening to commence Director Disqualification proceedings against me and also seeking a Compensation Order payment from me personally.  The allegations of Unfit Conduct made against me by the Insolvency Service stemmed from an allegation of misuse of funds received into the company from a Bounce Back Loan (‘BBL’).”

Very stressed about the allegation, our client found us online and got in touch

“I searched the internet and read Testimonials about Neil Davies & Partners (‘NDP’) and immediately contacted them. I was put in touch with Sukhbir Mall, a Director of NDP, who put me at ease and explained matters to me.

I instructed NDP to get on with the work immediately. The speed at which they responded was impressive and Sukhbir explained things to me in layman’s terms that I could easily understand.”

A way forward was quickly found

“I provided Sukhbir with a detailed background to matters and he quickly got to grips with the facts, which were then presented to the Insolvency Service.

I was overwhelmed when Sukhbir broke the news to me that the Insolvency Service had decided to drop their investigation and abandon any claims against me for a Compensation Order.”

NDP were consistent in their approach, user friendly and competitively priced.

“I would highly recommend Sukhbir and the team who guided me through this treacherous and dark journey.”

D.B. (Somerset)

Comment from our Director Disqualification Solicitors

Allegations against company Directors for the alleged misuse of BBL’s are not always straightforward. The full circumstances of the case always need to be looked at. The practical impact and consequences for Directors if not properly represented or advised can be devastating and can include exclusion from acting as a company Director and could also result in a further draconian penalty by way of a Compensation Order, or even a prison sentence.

There may be specific and particular circumstances in which the application for a BBL was made and how the sums received were applied that, as in this case, answer and meet the Insolvency Service’s concerns.  Each matter needs to be looked at in great detail, in particular the self-certification of turnover when the BBL was applied for. Take a look at some of our other testimonials for BBL fraud allegations.

Our experienced team is able and ready to assist you, or a client, if you face similar circumstances to those referred to above. Simply contact us or call us on 0121 200 7040 for a confidential, free of charge and no obligation initial chat.