Director banned after abuse of Covid loan
A Birmingham director has been banned from the corporate arena after abusing the Bounce Back Loan scheme during the Covid-19 pandemic.
Mathius Thompson, 33, was the sole director of West Midz Cars Ltd in Ladywood, Birmingham. In May 2020 he applied for a Bounce Back loan of £50,000 for his used car dealership.
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% 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.
Thompson stated in his loan application that the dealership’s turnover for 2019 was around £287,500, and received the maximum £50,000 loan for the company. But the business went into liquidation in August 2021 owing £53,500, including the full amount of the Bounce Back Loan, which triggered an investigation by the Insolvency Service.
Investigators discovered that West Midz Cars Ltd’s turnover in 2019 had been just over £2,500 and the company’s bank statements for that year show no income or trading activity, meaning the business had not been entitled to a loan.
The company accounts also showed no evidence that the money had been used for the economic benefit of West Midz Cars. A compensation order of £50,000 is now being sought, to repay the loan provider.
The Secretary of State for Business, Energy and Industrial Strategy accepted disqualification undertakings from the director after he misled a bank to obtain a loan when it was ineligible and did not provide evidence that the loan was used for the economic benefit of the company.
Mathius Thompson is now banned for 11 years from 30 Jan 2023 from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.
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”.
Thompson, “abused taxpayers’ money to either apply for loans to which they weren’t entitled, or by failing to show that the money they claimed had been used to support their companies”.
His disqualification, “should serve as a reminder to others that the Insolvency Service will take action to protect the public and the taxpayer”.
