Two construction bosses have been banned from running businesses for 11 years, after they wrongly applied for £100,000 in rebound loans during the pandemic.
David Harrison and Paul Hudson were directors at Ace Building and Maintenance Services, a Devon-based plastering company established in June 2017.
On May 4, 2020, the couple successfully applied for a £50,000 bounce-back loan, but did not say the company was in trouble and had entered into a voluntary agreement with almost £110,000 in liabilities.
They followed up with a second “fake” request on June 16, 2020.
The Insolvency Service’s chief investigator, Mike Smith, said: ‘Rebound loans have provided a vital lifeline to help viable businesses through the pandemic.
“David Harrison and Paul Hudson, however, cynically asked for government assistance to which they were not entitled, when they knew full well that their company was insolvent and unable to pay its debts.”
Smith added: “Eleven years is a considerable period 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 struggle. vigorously against financial misconduct.”
According to the report, the company began to struggle to pay its debts and as a result, it faced a liquidation petition in October 2019.
In February 2020, the company took voluntary insolvency action, followed by a voluntary liquidation of creditors in December 2020, with the company reporting liabilities of over £340,000.
According to the insolvency service, an investigation was opened when the company became insolvent. It was later found that the administrators had submitted “two fictitious applications” for bounce-back loans.
Harrison’s ban went into effect May 31, while Hudson’s began June 9. The couple are now prohibited from getting directly or indirectly involved in promoting, forming or running a business without court permission.
The Bounce Back loan scheme was introduced by the government in 2020, after the economy was hit during the pandemic. It was intended to help small businesses borrow between £2,000 and £50,000 at a low interest rate to help them out over the period.
Ace Building and Maintenance Services could not be reached for comment.
In April, the director of a recruitment agency specializing in construction was banned for six years, after discovering that they were not keeping their accounts as they should have been.