Director misled bank over turnover to get covid loan

Peninsula Team

December 08 2022

Restaurant and fashion bosses have been banned for misconduct including bounce back loan abuse and failure to keep company accounts

The company directors have been disqualified for a total of 19 years following separate Insolvency Service investigations which uncovered financial misconduct.

Sajid Anver Valimohammed, sole director of J Dee Designs Ltd, was disqualified for eight years after he failed to keep business accounts and records and was unable to hand them over to the company’s liquidators.

J Dee Designs Ltd was incorporated in July 2019 and traded as a fashionwear finisher in Leicester until it went into liquidation in December 2020.

Investigators discovered that Valimohammed had withdrawn more than £286,000 from the company bank account through 199 separate transfers with the reference ‘Mrref Self FT’ during the time J Dee Designs was in business.

They found that in total £315,000 was withdrawn from the company’s bank account during that period, including £30,000 from a bounce back loan that the company had applied for.

Due to his failure to keep company accounts, investigators were unable to verify whether J Dee Designs had paid the correct amount of tax it owed, or to ascertain the true financial position of the company when it went into liquidation.

Valimohammed did not contest the disqualification order in court and was banned from being a director for eight years. His ban began on 30 November and the court also awarded full costs to the Insolvency Service.

Savio Gilbert Pereira, sole director of Himalayan Zest Takeaway Limited, was disqualified for 11 years after he fraudulently obtained a £50,000 bounce back loan.

Himalayan Zest, which was incorporated in April 2018, traded as a takeaway food shop and mobile food stand based in Lutterworth.

The company went into liquidation in November 2021, owing £51,500, which triggered an investigation by the Insolvency Service.

In June 2020, Pereira had applied for a bounce back loan, stating the company’s turnover was £207,500. This allowed Pereira to receive the maximum £50,000 loan.

Investigators discovered that Himalayan Zest only had around £54,000 in its bank account following receipt of the loan.

Between June and August that year, Pereira had made a £10,000 payment to himself, £28,000 in various debit payments to an unknown recipient and had also withdrawn a total of £16,800 in cash.

He was unable to prove that these transactions were for the economic support of the restaurant.

Pereira’s disqualification started on 15 November and lasts for 11 years.

Dave Elliott, chief examiner at the Insolvency Service, said: ‘The Insolvency Service takes bounce back loan abuse and the failure to keep, preserve and deliver up books and records very seriously.

‘The length of these directors’ bans reflects the gravity of their misconduct and should serve as a warning to others.’

The bans prevent the directors from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.

If you have questions on other enforcement measures on company directors, visit BrAInbox today where you can find answers to questions like What is the name and shame scheme for not paying national minimum wage?

Read more from the latest BrAInbox Business News update:

Small businesses owed £23.4bn in late payments

Taskforce recovers £400m from fraud probes

Tips and advice on restructuring companies

Reasonable adjustments: how far do you need to go?

 

Suggested Resources