Bounce Back Loan Scheme

Updated News on Bounce Back loan Scheme

Since *February 2021*, the Insolvency Service has successfully petitioned the Courts to wind up five limited companies that have been involved in abusing government loans, introduced to help businesses during the pandemic.

These include a furniture retailer in Manchester, and two Glasgow-based companies, for which no legitimate business activity was identified since at least January 2020.

Most recently, the owner of Ikandy Wholesale, Raashid Khan, was disqualified as director for a period of 12 years after he was found to have fraudulently claimed £50,000 through the Bounce Back Loan Scheme (BBLS) before transferring the full amount out of the company’s account to himself just days before his company went into administration.

*The Bounceaw 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* (Dave Elliott) - chief investigator at the Insolvency Service.

*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.*

He revealed that the Insolvency Service will also soon have extra powers to investigate Bounce Back Loan fraud in cases where the company has been dissolved.

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, currently before Parliament, if passed will give the Insolvency Service powers to investigate, and if appropriate take action to disqualify directors of companies which have fraudulently claimed Bounce Back Loans but which have since been dissolved. This power will be retrospective to allow conduct that took place before the law comes into force to be investigated.

If wrongdoing or malpractice is found, directors can face sanctions including a *ban of up to 15 years*, and potentially criminal prosecution.