News |Bounce Back Loans

7th July 2022

Insolvency Service continues push to address misuse of Covid support schemes

Two new cases reported at the beginning of July, following prolific first quarter.

The Insolvency Service has announced the latest punishments handed out to two directors who abused Covid-19 financial support.

These are two in a string of recent announcements (see News from 27th June, 23rd June, 22nd June, 20th June and 7th June), with official data from the Insolvency Service further illustrating the extent of their work in this area over recent weeks and months.

Of the 99 director disqualification outcomes published in Q1 of the 2022/23 financial year, nearly 40% of them mention Covid-19 support schemes. The most cited pandemic-related conduct being abuse of the Bounce Back Loan Scheme (in 37 disqualification outcome summaries).

And the Bounce Back Loan Scheme (BBLS) was at the heart of Grigorijs Hacaturjancs’ ten-year disqualification announced at the end of last week. The director of online retailer Beauty&Melody Shop Ltd (not connected to a chain of salons in London with the same name) applied for, and obtained, a £50,000 loan from the BBLS in May 2020. Three issues with this application have since been highlighted:

  1. The company was ineligible for the scheme as an online-only retailer, i.e. a business that wasn’t directly affected by coronavirus-related restrictions.
  2. Beauty&Melody Shop Ltd had ceased trading more than a year before the application was made.
  3. Hacaturjancs “inflated the company’s turnover on the BBL application in order to secure the maximum £50,000 available through the scheme.”

Furthermore, the company then made “a payment of nearly £50,000” to a Slovakian business, two weeks after receiving the loan monies. While Hacaturjancs described this as a payment to a supplier, there was no evidence that the two companies had ever done business together before, and Beauty&Melody “received no goods or services in return for the payment.”

The other case reported by the Insolvency Service on 1st July also involved an £18,000 loan from the BBLS, as well as a £25,000 local council grant. Rathudi Mahesh Manglanand is now subject to a nine-year bankruptcy restrictions undertaking, after admitting he spent most of the funding on alcohol and gambling.

The sole trader, from Pontypridd, ran a restaurant in Cardiff, which ceased trading before the Covid-19 pandemic. This didn’t stop Manglanand from successfully applying for a £25,000 grant in April 2020 and an £18,000 loan a month later.

Manglanand told Insolvency Service investigators that “he had lost around £30,000 through gambling in the space of a year.”

The restrictions placed upon him came into effect on 20th June 2022. Hacaturjancs’ disqualification is effective from 12th July 2022.

In both cases, the individuals had voluntarily entered into insolvency proceedings – Hacaturjancs placed his company into voluntary liquidation in July 2021; Manglanand applied for his own bankruptcy in the same month – which triggered investigations by the Insolvency Service. The current assessment by the liquidator is “that Hacaturjancs has no personal assets”, while “the Official Receiver is assessing assets available” in Manglanand’s case.

These announcements at the beginning of July suggest that the pace of the response to Covid support scheme abuse we saw in Q1 will continue in the second quarter.

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, on +44 (0)843 515 8686 or via our contact form.

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



Insolvency & Debt Investigations

Seeing the whole picture in insolvency and debt cases is key to maximising returns to creditors.

What are you looking for?

Get the advice you need

Deep dive for the answers you need
Or contact us on +44 (0)843 515 8686 or at

Deep dive for the
answers you need

Lawyers, accountants, advisors, investors, senior
management. You name them, we help them find the answers
they need. Ready to discover how we can help you?