By Niamh Tracey | 12 July, 2023

Two directors banned for £50k bounce back fraud

A bookkeeper and sound engineer have been banned as company directors for a total of 17 years after falsely claiming £50,000 each in bounce-back loans

Azmi Shafi Ahmed, from Essex, was the sole director of AZ Financials Ltd, trading as a bookkeeper. In July 2020, he applied for a £50,000 bounce-back loan for the company, after claiming that its previous year’s turnover had been £200,000.

However, when the company went into liquidation in November 2022, an investigation by the Insolvency Service was triggered into the director’s conduct.

Investigators found that the company’s turnover in the previous year had been less than £40,000. Ahmed had exaggerated the figures in the loan application by at least five times the true amount, to claim over £40,000 more than the bookkeeper had been entitled to.

They also found that three days after the money arrived in the company’s account, Ahmed transferred the full £50,000 to his personal bank account.

He has currently repaid £25,000 to the company’s liquidator, and the remainder will be repaid this month.

In a separate case, George Pinnegar, from West Sussex, also applied for a £50,000 loan for his company, London Sound Engineering Ltd.

Pinnegar made the application in July 2020, after claiming the estimated turnover for the previous year to be £250,000. Under the rules of the scheme, if a business began trading after 1 January 2019, its estimated annual turnover could be used to claim a loan.

The business traded as a sound engineering firm; despite being listed on Companies House as a temp agency. It went into liquidation in August 2021, still owing the full amount of the loan.

Investigators discovered that the company had filed dormant accounts which showed that it had not been actively trading on 1 March 2020 – one of the criteria required to apply for a bounce-back loan.

They also found that Pinnegar had transferred almost £38,000 to his personal bank account over six months. And he paid the remaining £12,000 into the bank account of a connected company.

Lawrence Zussman, deputy head of company investigations at the Insolvency Service, said: ‘The bounce back loan scheme was designed to support active businesses through the pandemic.

‘Azmi Ahmed and George Pinnegar exploited this support and abused the public purse for personal gain. These bans show that abuse of taxpayers’ money will not be tolerated, and rogue directors will be prevented from running a business.’

Ahmed was handed a six-year disqualification, which began on 13 June 2023, preventing him from becoming involved in the promotion, formation or management of a company, without the permission of the court. Pinnegar’s 11-year disqualification started on 20 June 2023.

 

Source: Croner-i