Former London Minicab Driver Handed 11-Year Sanctions for Covid Loan Abuse
January 17, 2025 14:17 GMT
A former London minicab driver has been banned from being a company director for 11 years after he abused the government’s Covid-19 loan scheme.
Irfan Rashid, 42, obtained two Bounce Back Loans totaling £50,000 for his minicab company, Rapid Cars (UK) Ltd, during the pandemic. However, investigators from the Insolvency Service found that Rashid had used the funds for personal expenses, including gambling and overseas travel.
The Bounce Back Loan Scheme was introduced by the government to help businesses survive the economic impact of Covid-19. The loans were designed to be interest-free for the first 12 months and could be used for any business purpose.
However, the Insolvency Service investigation found that Rashid had breached the terms of the scheme by using the funds for personal gain. He had also provided inaccurate information to the lender about his company’s financial position.
As a result of his actions, Rashid has been disqualified from being a company director for 11 years. This means that he cannot hold any position of authority in a company or act as a company secretary.
The Insolvency Service’s investigation also found that Rapid Cars (UK) Ltd had entered liquidation with debts of over £200,000. Rashid was the sole director of the company at the time of liquidation.
The Insolvency Service’s Chief Investigator, Julie Barnes, said: “Irfan Rashid abused the government’s Covid-19 loan scheme for his own personal gain. He provided false information to obtain the loans and then used the funds to gamble and travel abroad.
“This is a serious case of abuse and we will not hesitate to take action against directors who breach the terms of the scheme. We are working closely with lenders to identify those who have abused the scheme and we will continue to take enforcement action where appropriate.”
The Bounce Back Loan Scheme has been used by over 1 million businesses to access over £47 billion in loans. The scheme has been widely welcomed by businesses, but there have been concerns about the potential for abuse.
The Insolvency Service is responsible for investigating and taking action against directors who abuse the scheme. To date, the Insolvency Service has banned 40 directors for a total of over 100 years for Covid loan abuse.
The Insolvency Service is also working with lenders to identify and pursue directors who have abused the scheme. Lenders have been urged to report any suspected cases of abuse to the Insolvency Service.
Businesses that have obtained Bounce Back Loans are reminded that the loans must be used for business purposes only. Directors who abuse the scheme may face disqualification and other legal action.
Former London minicab driver handed 11-year sanctions for Covid loan abuse
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