DECLASSIFIEDNews |Bounce Back Loans
Devon-based building company directors accept disqualification for abusing Covid-19 support scheme.
The directors of Ace Buildings and Maintenance Services Limited have been banned from running companies for 11 years, after an Insolvency Service investigation found they falsely applied for £100,000 under the Bounce Back Loan Scheme.
This is the second such announcement from the Insolvency Service in the space of two weeks – the director of a Manchester-based takeaway who abused the Eat Out to Help Out and furlough schemes was banned for seven years earlier this month.
David Harrison and Paul Hudson, from Devon, obtained a £50,000 bounce back loan in May 2020, but failed to declare that their business was in the midst of a company voluntary arrangement (CVA).
Furthermore, the directors made a second application to the scheme for another £50,000 loan, despite the fact they had already received the maximum allowance and their company was still in insolvency.
Ace Buildings and Maintenance Services Limited owed around £110,000 when it entered into a CVA in February 2020. Despite taking out the £50,000 loan, the company fell into liquidation in December of the same year “with the company stating liabilities of more than £340,000.”
That creditors voluntary liquidation (CVL) triggered an Insolvency Service investigation, which eventually led to both directors receiving disqualifications.
“11 years is a substantial amount of time to be removed from the corporate arena and their disqualifications will protect the public and creditors, while also serving as a clear warning to other rogue directors that we will robustly tackle financial misconduct”, said Mike Smith, Chief Investigator for the Insolvency Service.
Ace Buildings and Maintenance Services Limited – incorporated in June 2017 – had a short but tumultuous existence, with a winding-up petition served against the company as early as October 2019.
The company’s liquidators, KJG (part of the Xeinadin Group), are assessing ways to recover the Bounce Back Loan funds, as well as money owed to other creditors.
Smith also noted that “Bounce back loans provided a vital lifeline to help viable businesses during the pandemic. David Harrison and Paul Hudson, however, cynically applied for government support they were not entitled to when they were fully aware their company was insolvent and was not able to pay its debts.”
Harrison’s disqualification runs from 31st May 2022, and Hudson’s ban started on 9th June.
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