A Rotherham-based businessman has been found guilty of making a false application for a government scheme designed to enable businesses to access finance more quickly during the coronavirus outbreak.
The Insolvency Service has been carrying out work to target Covid loan abuse.
In January 2024, Abdullah Khan, formerly known as Imran Khan, 32, was given a ten year Bankruptcy Restrictions Order (BRO).
Whilst not a criminal offence, a BRO is a legal order from the court which extends the period of time where certain restrictions have to be followed. They are often used for people going bankrupt when the official receiver thinks they have been dishonest or are to blame for the debts.
Khan, of Norrel’s Croft, Rotherham, obtained a £50,000 loan in June 2020 for his AK Courier Services business.
However, he overstated the turnover of his business, claiming it was £203,000 and received at least £36,000 more than he was entitled to.
The application stated that his business turnover for the year ended 31 December 2019 was £203,000 but according to his tax returns Mr Khan’s business turnover for 2018/19 was £15,077 and for 2019/20 was £37,784. The average turnover for the year ended 31 December 2019 was therefore £31,975, which entitled him to a Bounce Back Loan of £7,994.
At bankruptcy in March 2022, Mr Khan had liabilities of £62,568, of which £50,000 is in respect of the loan.
Khan appeared at the County Court in Leeds in January where he was handed the BRO.
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The Bounce Back Loan Scheme was available through a range of accredited lenders and partners and provided financial support to businesses across the UK that were losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak, or could benefit from £50,000 or less in finance.
A lender could provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount was £50,000. The scheme gave the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).
The scheme saw over 1.5 million loans approved, totalling £47bn.
So far in 2023-24, the Insolvency Service has secured 757 director disqualifications and 69 bankruptcy restrictions relating to Covid financial support scheme abuse allegations.
Robert Peck, Director of Official Receiver Services at the Insolvency Service, said: "Tackling Bounce Back Loan abuse is a key priority for the Insolvency Service and we will take action against those who applied for these loans giving misleading information during the pandemic.
"Bankruptcy Restrictions Orders and Undertakings are a tool available at our disposal to limit the activities of those who have provided false details to obtain credit or who have otherwise acted dishonestly."
Images: Insolvency Service / twitter
The Insolvency Service has been carrying out work to target Covid loan abuse.
In January 2024, Abdullah Khan, formerly known as Imran Khan, 32, was given a ten year Bankruptcy Restrictions Order (BRO).
Whilst not a criminal offence, a BRO is a legal order from the court which extends the period of time where certain restrictions have to be followed. They are often used for people going bankrupt when the official receiver thinks they have been dishonest or are to blame for the debts.
Khan, of Norrel’s Croft, Rotherham, obtained a £50,000 loan in June 2020 for his AK Courier Services business.
However, he overstated the turnover of his business, claiming it was £203,000 and received at least £36,000 more than he was entitled to.
The application stated that his business turnover for the year ended 31 December 2019 was £203,000 but according to his tax returns Mr Khan’s business turnover for 2018/19 was £15,077 and for 2019/20 was £37,784. The average turnover for the year ended 31 December 2019 was therefore £31,975, which entitled him to a Bounce Back Loan of £7,994.
At bankruptcy in March 2022, Mr Khan had liabilities of £62,568, of which £50,000 is in respect of the loan.
Khan appeared at the County Court in Leeds in January where he was handed the BRO.
Advertisement
The Bounce Back Loan Scheme was available through a range of accredited lenders and partners and provided financial support to businesses across the UK that were losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak, or could benefit from £50,000 or less in finance.
A lender could provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount was £50,000. The scheme gave the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).
The scheme saw over 1.5 million loans approved, totalling £47bn.
So far in 2023-24, the Insolvency Service has secured 757 director disqualifications and 69 bankruptcy restrictions relating to Covid financial support scheme abuse allegations.
Robert Peck, Director of Official Receiver Services at the Insolvency Service, said: "Tackling Bounce Back Loan abuse is a key priority for the Insolvency Service and we will take action against those who applied for these loans giving misleading information during the pandemic.
"Bankruptcy Restrictions Orders and Undertakings are a tool available at our disposal to limit the activities of those who have provided false details to obtain credit or who have otherwise acted dishonestly."
Images: Insolvency Service / twitter
