Read on for the full details of this case that led to the 10 year ban.
Ahamad Muzafar (“Mr Muzafar”) caused CFC Foods Limited (“CFC”) to overstate its turnover in an application to obtain a Bounce Back Loan (“BBL”), and as a result on 18 May 2020 CFC obtained a BBL that was at least £17,436 in excess of the amount it was eligible to borrow under the BBL scheme terms.
Thereafter Mr Muzafar did not use at least £27,146 of the BBL for the economic benefit of CFC, which was in breach of the terms of the scheme.
In that:
- Under the BBL scheme, businesses were entitled to apply for a loan of between £2,000 and £50,000, up to a maximum of 25% of turnover in the calendar year 2019.
- CFC was incorporated on 10 October 2017 and began trading in January 2018 Mr Muzafar applied for a BBL of £50,000 on behalf of CFC and disclosed an annual company turnover of £200,000 on the application form.
- The £50,000 BBL was paid into CFC’s bank account on 18 May 2020.
- Accounts prepared for the company for the year ended 31 October 2019 show that its turnover was £130,257.
- These accounts were signed by Mr Muzafar on 14 April 2020.
- Information provided by CFC’s accountant show its actual turnover for the 2019 calendar year was between £113,381 and £125,803.
- This would have entitled CFC to a maximum BBL of £32,564.
- In the period between 18 May 2020 and 01 September 2020, transfers totalling £40,300 were made to Mr Muzafar from CFC’s bank account. In the same period, CFC received sales receipts of £11,096 and before the BBL funds were paid in there was a credit balance on the account of £2,058.
- At least £27,146 of the payments to Mr Muzafar were therefore funded directly from the BBL funds.
- Mr Muzafar has failed to provide evidence to show that the monies paid to him were used for the benefit of CFC.
- On 25 August 2022 CFC entered into liquidation with creditors of £112,362 of which £46,000 was owed in respect of the BBL.
