For the wrongdoing associated with a Barclays Bounce Back Loan the Company Director named in this case, is starting a 10 year ban today.
On 08 March 2021 Mr Roohullah Laally (‘Mr Laally’) applied for and obtained a government-backed Bounce Back Loan (‘BBL’) of £50,000 for PFC Westcliff Ltd (‘PFC’), by providing false or knowingly inaccurate information regarding PFC’s turnover in 2019.
In addition, the loan was not used in its entirety for the economic benefit of the business, in contravention of the conditions of the scheme.
In that:
- The BBL scheme allowed businesses affected by the Coronavirus pandemic to apply for a BBL of between £2,000 and £50,000, up to a maximum of 25% of turnover in the calendar year 2019 or if incorporated after 1 January 2019 its estimated turnover from the date the business was started.
- PFC was incorporated on 15 May 2015 and commenced trading in May/June 2015.
- Accounts for the year to 31 May 2020 disclose turnover of £70,950.
- On 08 March 2021 Mr Laally signed an application form for a BBL of £50,000 for PFC stating that its turnover in 2019 was £204,000.
- PFC would have been due a BBL of at most £17,738.
- The BBL was received on 09 March 2021 at which time the company bank account was £7,266 in credit.
- Between 10 March and 27 May 2021 £35,000 was transferred to Mr Laally’s personal account and £5,000 was withdrawn in cash.
- During the same period company trading receipts were £19,602.
Therefore at least £13,132 of the funds paid to Mr Laally were funds from the BBL for personal benefit and there is no evidence that these payments were for the economic benefit of the Company as required by the BBL scheme.
Mr Laally failed to ensure that PFC maintained and/or preserved adequate accounting records, or in the alternative, he failed to ensure that such records as were maintained and/or preserved, were delivered to the Liquidator.
As a result, it has not been possible to determine:
- Why accounts for the year to 31 May 2020 disclose turnover of £70,950, when bank statements for the same period show income of only £29,808.
- Why accounts for the following year disclose turnover of £83,304, but bank statements show total income of £60,786.
- Determine PFC’s income for the period after May 2020.
- Ascertain how this income was disbursed and verify that all payments made were legitimate company expenditure.
- Establish what payments were made to Mr Laally and/or other employees, or determine that all tax was properly accounted for to HMRC.
- Verify what the tangible assets of £17,202 shown on the accounts to 31 May 2021 were and what has happened to them.
