DECLASSIFIEDNews |Bounce Back Loans
Engineering company director banned for eleven years.
The sole director of a surveyor’s firm, CKO Civil Engineering and Surveying Limited (CKO), has been disqualified for eleven years for his abuse of the Bounce Back Loan Scheme (BBLS).
John McGarvey, from Rutherglen (a town on the outskirts of the centre of Glasgow), falsely claimed two Bounce Back Loans worth a total of £100,000 and used the money “for personal gain.”
In addition to claiming two loans each at the maximum amount allowed under the scheme (companies were limited to one £50,000 loan or multiple loans totalling no more than £50,000) and using the funds for his own use (instead of “for the economic benefit of the business”), McGarvey also exaggerated his company’s turnover in order to obtain the loans.
The BBLS allowed companies to apply for loans of up to a quarter of their 2019 turnover to a maximum of £50k. McGarvey’s applications through CKO stated the company’s 2019 turnover as £225,000 (in a July 2020 application) and £218,000 (in an application the following month). In reality, CKO’s “most recent accounts showed a turnover of only around £46,400.” Therefore, CKO was given loans worth more than eight times the amount it was eligible for.
CKO, based in Kirkinitlloch (also near Glasgow), entered a creditors voluntary liquidation (CVL) owing around £183,000 in November 2021. The liquidation process triggered an Insolvency Service investigation, which revealed the Bounce Back Loan Scheme abuse.
McGarvey’s disqualification started on 28th October 2022 – the details of the case have only been announced by the Insolvency Service today (8th December 2022) – and lasts for eleven years.
Of the case, Steven McGinty, Insolvency Service Investigation Manager, said:
“Not only did John McGarvey grossly exaggerate the company’s turnover to secure an initial loan, he also applied to a second bank for another loan his company wasn’t entitled to. To compound his actions, he used the money for his personal gain.
“His eleven-year ban should serve as a warning that if you abuse government support, we will use our full powers to bring you to account.”
McGarvey’s case was settled through a disqualification undertaking, which was accepted by the Secretary of State. Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
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