Bounce Back Loans were government-backed loans designed to support businesses through the COVID-19 pandemic. Under the rules of the scheme, companies were allowed to borrow up to 25 per cent of their 2019 turnover, up to a maximum of £50,000.
Malcolm Forbes, Avin Habash, and Kamil Ozkan were directors of three separate companies that applied for Bounce Back Loans. But each caused their companies to abuse the COVID-19 support scheme, which was only uncovered after the companies entered into liquidation.
Mr Forbes, from Portsmouth, was the sole director of Nija Bite Limited, which operated as a takeaway called Iroko Lounge on Onslow Road in Southampton and a mobile food stand.
Inquiries uncovered that Mr Forbes received the maximum £50,000 Bounce Back Loan having submitted an application that declared a turnover of £225,000. However, Mr Forbes grossly exaggerated the company’s turnover, which was closer to £24,000 and this would have only entitled Nija Bite Limited to a £6,000 loan.
Liverpool’s Ms Habash, was the sole director of Hot Spot Liverpool Limited, which traded as Hot Spot, a takeaway in Liverpool city centre on Temple Court.
Ms Habash caused the company to apply for a Bounce Back Loan and secured £50,000 claiming a turnover of £200,000. Investigators, however, found that Hot Spot Liverpool Limited’s actual turnover was closer to £100,000, which should have only entitled the eatery to circa £26,000.
And Mr Ozkan, from West Rainton, Houghton le Spring, was the sole director of Papa Peterlee Limited, trading as Martinos Italian Kitchen on York Road in Peterlee.
Investigators discovered that Papa Peterlee Limited successfully received a £50,000 Bounce Back Loan. But instead of using the loan for the economic benefit of the company, Mr Ozkan caused the company to transfer up to £37,500 to his personal account.
The three restaurateurs are now banned from directly, or indirectly, becoming involved in the promotion, formation, or management of a company, without the permission of the court.
Mike Smith, chief investigator for the Insolvency Service, said COVID-19 support schemes provided a lifeline to businesses, protecting jobs and preserving businesses. However, Mr Forbes, Ms Habash and Mr Ozkan flagrantly abused that support when they either personally benefited from the loan or exaggerated turnover to secure more money than they were entitled to.
The three restaurateurs have now been removed from the corporate arena and creditors will be protected from any further harm. Their bans clearly demonstrate that the Insolvency Service will not hesitate to take action against directors who have abused COVID-19 financial support like this.
