Read on for the details of this case.
MACB Engineering Ltd
Macdonald Boella (“Mr Boella”) caused MACB Engineering Ltd (“Eng”) to breach the terms of the Government backed BBL scheme by applying for a loan of £50,000 when Eng did not meet the eligibility criteria for the BBL.
In that:
- The BBL scheme stipulated that a Company was required to be carrying on business as at 1 March 2020, be engaged in trading or commercial activity in the UK at the date of the application to be entitled to apply for a BBL of up to 25% of its turnover in the calendar year 2019, or its estimated annual turnover if the Company was incorporated after 1 January 2019.
- Eng was incorporated on 29 July 2019.
- Therefore, it was eligible to estimate its turnover based on its income from incorporation to BBL application, extrapolated over a 12 month period.
- Following a review of Eng’s bank statements, the only income received between 29 July 2019 and 16 May 2020 was a total of £328 transferred in from an associated company.
- There was no trading income into the bank account. Eng does not appear to have been carrying on business as at 1 March 2020 or have been trading at the date of the BBL application.
- Based on this information, Eng was not eligible to a BBL. • On or before 29 May 2020 Mr Boella, on behalf of Eng, applied for a BBL of £50,000.
- Mr Boella estimated Eng’s turnover for 2019 being £250,000 and the BBL funds were received into Eng’s bank account on 29 May 2020.
- The £50,000 BBL remains outstanding in full at the date of liquidation.
MACB Contractors Ltd
Macdonald Boella (“Mr Boella”) caused MACB Contractors Ltd (“Contractors”) to overstate its turnover in application to obtain a Government-backed Bounce Back Loan (“BBL”) of £50,000 resulting in Contractors receiving £29,279.48 more in BBL funds than it was entitled to, and thereafter did not use the money obtained in compliance with the terms of the scheme being not for the economic benefit of the business.
In that:
- Under the BBL scheme, businesses could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover for the calendar year 2019.
- The turnover figure was self-certified by the applicant.
- The purpose of the loan was to provide economic benefit to the business and not for personal purposes.
- Contractors was incorporated on 31 July 2015.
- On behalf of Contractors Mr Boella applied for a BBL of £50,000 on or around 15 May 2020.
- Mr Boella on the application form, stated that Contractors had a turnover of £200,000.
- Draft Contractors accounts for the year ending 31 July 2019 show a turnover of £90,975.
- Bank analysis shows that Contractors had a turnover of £82,882.07 in the calendar year 2019.
- Contractors would have been entitled to a BBL of £20,720.52.
- Based on the information available, Contractors received £29,279.48 more in BBL funds than it was entitled to.
- On 16 May 2020 BBL of £50,000 was received into Contractors’ bank account and the whole of the BBL of £50,000 was then transferred to Mr Boella’s personal account on the same day.
- No evidence has been provided to show that the BBL was used for the economic benefit of Contractors.
