As we’ve been reporting, the Insolvency Service’s recent press releases have been awash with director disqualifications and bankruptcy restrictions related to misuse of the Bounce Back Loan Scheme (BBLS).

While there were only two updates from the Insolvency Service on the subject in June, those updates covered £600,000 of Bounce Back Loans and thirteen companies.

Network of sham companies wound up

Eleven companies have been wound up after an Insolvency Service investigation uncovered “systematic fraud” to the tune of £500,000 through the Bounce Back Loan Scheme.

While the group of companies listed various registered office addresses across England, no evidence of trading premises nor trading could be found for any of the companies. Despite never having traded, the companies obtained Bounce Back Loans during the Covid-19 pandemic, with nine of the eleven claiming the maximum £50,000 loan and one company securing two loans.

Money was moved around the network of fake companies – which were also linked by their registered addresses, in some instances – before eventually “being transferred to entities registered in Hong Kong.” The investigation started after the Insolvency Service found links between these eleven companies and five other companies that were wound up in 2021 and 2022. The five companies in the earlier investigation fraudulently obtained £250,000 through the BBLS, as well as £350,000 through other schemes.

The companies were wound up in the High Court in Manchester with the Official Receiver appointed liquidator and now “working to trace the funds and those responsible, with a view to recovering the money.”

The eleven companies in question are:

• Laslett Industries Limited (company reg no 11690274).
• JP Capital Management Ltd (formerly called Hampton Brookers Limited) (company reg no 11690206).
• CMJA Limited (company reg no 11690056).
• JK Distributions Limited (company reg no 11667454).
• Kubrick Trade Ltd (company reg no 11386566).
• Lowe Brokers Limited (company reg no 11474219).
• Rubeum Auri Limited (company reg no 11886277).
• Share Apartment Limited (company reg no 12248395).
• Stella Management Limited (company reg no 11886188).
• Globexel Ltd (company reg no 12063877).
• JLS Enterprises Limited (company reg no 11830409).

Personal use of loan funds and exaggerated turnovers

George Pinnegar successfully applied for the maximum £50,000 Bounce Back Loan through his company London Sound Engineering Ltd in July 2020. In the application, he gave an estimated turnover of £250,000 for 2019, as the company began trading after 1^st January that year, making the company eligible for the maximum loan amount. However, investigators found that the company had not been trading on 1^st March 2020. Under the rules of the Bounce Back Loan Scheme, companies had to be trading on that date to be eligible for a loan.

Pinnegar “transferred almost £38,000 of the loan money to his personal bank account” and the other £12,000 “into the bank account of a connected company.”

London Sound Engineering Ltd was listed as a temp agency on Companies House, but traded as a sound engineering business. The company’s liquidator – Ian Yerrill of Yerrill Murphy LLP – “is currently working to recover the funds.”

Pinnegar has been disqualified as a company director for eleven years from 20^th June 2023.

Azmi Shafi Ahmed also obtained a £50,000 Bounce Back Loan in July 2020 through his company AZ Fiancials Ltd, a bookkeeper in Ludgate Hill, London. He claimed the company’s 2019 turnover was £200,000 (the amount needed to apply for the maximum loan through the scheme). However, investigators found that Ahmed had exaggerated that figure by more than five times the true turnover, which was “less than £40,000”.

Ahmed moved the entire £50,000 he secured through the scheme into his personal bank account just three days after his company received the money.

He has repaid £25,000 of the the loan and has agreed to repay the remaining £25,000.

Ahmed has been disqualified for six years from 13^th June 2023.

Insolvency and debt investigations

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 mike.wright@esarisk.com, on +44 (0)843 515 8686 or via our contact form.

You can also learn more from our Insolvency & Debt Investigations brochure: