Salih Ozhot, 39, has been placed under eight years of additional bankruptcy restrictions after obtaining a loan from the Bounce Back scheme for a company that had never traded.
The Official Receiver was acting as Ozhot’s trustee in bankruptcy when they found he had successfully applied for a £50,000 bounce back loan for Kangaroo Courier Services, despite the fact “the business never traded and was ineligible for government support.”
Ozhot petitioned for his bankruptcy which was declared on 13th October 2021.
He spent £15,000 of the loan on creating a website for Kangaroo Courier Services, which was apparently formed in November 2019.
The Official Receiver, Mitzi Mace, asked for Ozhot’s bankruptcy restrictions to be extended “due to the risk he posed to creditors”.
She said that “Ozhot’s actions indicated a cavalier approach to business” after he “cynically applied for government support, intended to help viable businesses during the pandemic, for a business that didn’t even exist.”
Mace is now looking to recover the loan from Ozhot’s available assets.
Ozhot’s new bankruptcy undertaking runs from 11th May 2022 for eight years and restricts him from becoming “a company director without the court’s permission” and “from being able to borrow more than £500 without disclosing his bankrupt status.”
The news comes a few days after the release of the latest corporate and individual insolvency statistics for England and Wales, which show a 23.3% year-on-year increase in personal insolvencies. May 2022’s 10,476 personal insolvencies is also 11.2% higher than April’s figure.
Responding to the statistics, Christina Fitzgerald, President of R3, the insolvency and restructuring trade body, noted that “wages haven’t kept pace with inflation, and many people remain very worried about how they’ll manage to afford food, fuel and energy as all three of these necessities become increasingly expensive.
“People’s finances have been affected by the economic fallout from the pandemic, and combined with the increased cost of living, there are potentially a lot of people who are vulnerable to the kind of unexpected shocks that can lead to them becoming insolvent.”
While the number of corporate insolvencies decreased from April to May 2022, there was a huge 79.2% increase compared to this time last year (1,817 insolvencies in May 2022, up from 1,014 in May 2021), reflecting the current uncertainty faced by businesses in a challenging market.
Seeing the whole picture in insolvency and debt cases is key to maximising returns to creditors. For more information on how ESA Risk can help to identify hidden assets or locate targets who have gone to ground, contact Mike Wright, Investigations and Risk Management Consultant, at firstname.lastname@example.org, on +44 (0)843 515 8686 or via our contact form.
You can also learn more from our Insolvency & Debt Investigations brochure: