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 no announcements from the Insolvency Service on the subject in May, there were two interesting stories related to Bounce Back Loans from other sources – one from the Traffic Commissioners for Great Britain and another from the BBC.
The BBC reports that JVIP Group – a group of companies in the property sector – obtained “more than 40 Bounce Back Loans, each of about £50,000.”
The businesses, based in Tunbridge Wells, Kent, have faced insolvency since the start of last year, with the companies now either in administration or liquidation.
On the face of it, there is nothing necessarily wrong with companies in the group receiving loans under the Bounce Back Loan Scheme, designed to help businesses through the Covid-19 pandemic. However, the BBC article suggests that some of the companies were unlikely to have met the turnover requirements to access the maximum £50,000 loans, therefore implying that figures were manipulated during the application process.
Additionally, the article questions whether the JVIP Group companies were in financial difficulty before the pandemic, which would have made them ineligible for the scheme. The article quotes “a former member of staff who…said alarm bells were ringing in January 2020, three months before the first lockdown.”
Investors in the JVIP Group are “facing losses of up to £30m collectively”. Group director Peter Dabner “denies any wrongdoing.”
With formal insolvency processes underway across many of the group’s companies, it is only a matter of time before the facts about JVIP Group’s use of the Bounce Back Loan Scheme is revealed.
Gregorys Transport Ltd’s application for a goods vehicles operator’s licence was refused at a public inquiry, in part due to the director Gregory Swartz’s misuse of the Bounce Back Loan Scheme in his previous company.
Investigators found that GMAKX Ltd had a Bounce Back Loan of £40-45,000 which remained outstanding when the company was sold earlier this year. “The company had not had the necessary turnover to have been eligible for that Bounce Back Loan in the first place.”
Swartz was seen as “disposing of the company” by the Traffic Commissioner for the West of England, Kevin Rooney, in order to “avoid insolvency proceedings” and “avoid significant liabilities” including the Bounce Back Loan. His attempt to set up again almost immediately, using a new company, was blocked with the reason given that the commissioner was not satisfied that Gregorys Transport Ltd “is of good repute”.
Perhaps the most interesting element of the case, as set before the public inquiry, is the company that purchased GMAKX Ltd in January 2023 – Atherton Corporate Limited – and the director who replaced Swartz after the sale – Neville Taylor.
There are, apparently, “hundreds of businesses which appear[…] to have the same Mr Taylor listed as director albeit with several different dates of birth and addresses.” And additional research led to the discovery of related “websites touting services to protect reputations from insolvency.” A quick web search returns a host of sites doing just that with anti-insolvency practitioner messaging, promises of quick wins and specific mentions of Covid-related loans.
The commissioner decided that “if the sale was not illegal, it was certainly unethical.”
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: