This case revolves around a Lloyds Bank BBL
On 14 May 2020 Ibrar Hussain (‘Mr Hussain’) caused A Oasis Cars Ltd (“A Oasis”) to breach the terms and conditions of the Bounce Back Loan (“BBL”) scheme by overstating A Oasis turnover resulting in A Oasis receiving a loan of £42,000 which was more than it was entitled to.
In addition, Mr Hussain failed to ensure A Oasis used the proceeds of the BBL in their entirety for the economic benefit of the business as required under the terms of the BBL scheme.
In that:
- The BBL Scheme enabled a business to obtain a BBL of up to 25% of a business’s turnover (for the calendar year 2019) up to a maximum amount of £50,000.
- However, in circumstances where a business was established after 1 January 2019, the applicant was required to apply a 25% limit to the estimated annual turnover from the date they started the business.
- Further Loan terms included the requirement to use the loan to provide economic benefit to the business and not for personal use.
- A Oasis Ltd was incorporated on 31 August 2016
- Prior to receipt of the BBL, the company’s bank account was overdrawn in the sum of £9,072
- The last available prepared accounts were for the year ended 31 August 2018 which declare turnover of £79,474.
- Bank statements from 1 June 2019 to 14 May 2020, when the BBL was applied for, disclose total income of £76,020.
- If the income shown in the bank account is extrapolated to a 12 month period this would equate to an annual turnover of £79,505.
- The company should therefore have been entitled to £19,876.
- It received £22,124 more than it was entitled to.
- Following the receipt of the £42,000 BBL on 15 May 2020, £30,500 was withdrawn in cash prior to 28 July 2020.
- During this period £634 of trading income was deposited into the account.
- Full accounting records have not been delivered up to the Liquidator, it has therefore not been possible to establish whether the full income of the company was deposited in the company bank account or whether the payments made from that account were for the economic benefit of the company.
- No explanation concerning the use of the BBL funds has been provided by Mr Hussain.
- The statement of affairs shows that £52,390 remained outstanding to Lloyds at Liquidation. £9,950 of which related to the closing balance on the company bank account.
