Retailers banned after abusing £100k covid loans

Peninsula Blog

November 24 2022

Directors of Southsea online clothing business and Lewisham convenience store fraudulently claimed £100,000 in bounce back loans

David Okot from Deptford, London, received an 11-year disqualification, while Southsea’s Jason Meads has been banned for 10 years.

Okot was sole director of B&S News Ltd, which traded as a newsagent and convenience shop, B&S Newsagents, in Lewisham, London.

He purchased the shop in 2014 and ran it successfully until 2020 when increased competition in the area and rising costs meant that the business was no longer viable. The shop closed in January 2020 after failing to find a buyer.

Investigators, however, uncovered that Okot successfully applied for a £50,000 bounce back loan for B&S News Ltd in July 2020, despite being ineligible as the government-backed loan was only available for businesses trading during pandemic. This was after the company had stopped trading.

Further enquiries found that Okot had transferred the majority of the £50,000 loan from the company bank account into his personal account. The former convenience store owner said he was looking to relocate the business with the money but investigators found no evidence to support this claim.

Jason Meads, from Southsea, Portsmouth, was the sole director of Hodl Clothing Limited. The company was incorporated in April 2018 and operated as an online clothing retailer.

The company, however, went into liquidation in October 2021 before the Insolvency Service uncovered Meads had received government loans Hodl Clothing Limited was not entitled to.

Investigators discovered that Hodl Clothing Limited applied for two bounce back loans and received £37,500 after Meads falsely claimed turnover was £150,000 when turnover was £0.

Further enquiries uncovered that Meads transferred more than £36,000 from the bounce back loan to a personal account but could not provide any evidence that the funds were used for the economic benefit of Hodl Clothing Limited.

Tom Phillips, Assistant Director at the Insolvency Service, said: ‘Bounce back loans were offered to financially support viable businesses through the pandemic. The directors of these two retail companies have abused the bounce back loans support scheme.

‘David Okot applied for a loan despite having closed down his business before the pandemic, while Jason Meads used vastly exaggerated turnover figures to obtain more funding than his company would otherwise have been entitled to.

‘Thanks to the work of our diligent investigators, we have removed these rogue directors from the corporate arena. Both David Okot and Jason Meads have received top-bracket disqualifications, which should serve as a stark warning to other directors that there are serious consequences to those who have abused bounce back loans.’

The retailers are now prevented 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 insolvency proceedings, visit BrAInbox today where you can find answers to questions like What is a pre-pack administration?

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