A Pinner company director has been banned after abusing a government-backed COVID-19 support loan.
Ioan Mociar, 35, who was sole director of Midi Construction Ltd in Pinner, applied for a £41,000 Bounce Back Loan for his building company, and stated on the application that the business’s turnover in 2019 had been £166,000.
Bounce Back Loans were a government scheme to help keep businesses afloat during the COVID-19 pandemic. Under the rules of the scheme, companies could apply for loans of up to 25 per cent of their 2019 turnover, up to a maximum of £50,000. All loan money had to be used for the economic benefit of the business.
When Midi Construction Ltd went into liquidation in December 2021 with debts of around £46,000, including the full amount of the loan and almost £5,000 owed to HMRC, it triggered an investigation by the Insolvency Service.
Investigators found that as the building company had only begun trading in June 2019, accounts showed that its turnover for the year ending May 31, 2020, was around £45,500. Midi Construction had therefore received around £29,600 more than it was entitled to under the rules of the loan scheme.
They also discovered that payments of more than £39,700 had been made from Midi Construction Ltd’s bank account during a three-week period between October and November 2020, without any evidence to show that they were for the economic benefit of the company.
Ioan Mociar is now disqualified from becoming involved in the promotion, formation, or management of a company for 11 years.
Tom Phillips, assistant director of Company Investigations at the Insolvency Service, said: “The Bounce Back Loan scheme was designed to support businesses in genuine need. [Mociar has] been removed from the corporate arena, and [his] disqualification should serve as a reminder to others that the Insolvency Service will take action to protect the public and the taxpayer.”
Photo credit: insolvencygovuk
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