Boss banned for abuse of Covid loan system
A scaffolder has been banned from running a business for 11 years after abusing the covid-19 Bounce Back Loan system.
David McGuinness, 41 of Sutton Coldfield, was sole director of MC-Dalt Scaffolding Services, which was incorporated in 2017 with its registered office in Erdington in Birmingham.
In May 2020, McGuinness applied for and received a Bounce Back Loan of £50,000 on behalf of the company.
He then applied to dissolve the business two months later, which led to the Insolvency Service opening an investigation.
They found that McGuinness had stated the company’s turnover as nearly £300,000 when its accounts for 2019 showed turnover of less than £20,000. The company would therefore have only been entitled to a Bounce Back Loan of around £4,000.
Instead of using the Bounce Back Loan money for proper company use, the day after receiving the funds McGuinness transferred nearly £15,000 out of the company’s account, with the bank reference ‘Dave’. A further £35,000 was transferred to various third-parties.
When applying to dissolve the company, McGuinness was legally required to notify interested parties and creditors, such as a bank with an outstanding loan, within seven days and that a failure to do so could result in a criminal prosecution. He did not follow this advice.
The Secretary of State for Business, Energy and Industrial Strategy has now accepted a disqualification undertaking from McGuinness after he did not dispute he had abused the Bounce Back Loan scheme by claiming money to which his business was not entitled.
Peter Smith, deputy head of insolvent investigations at the Insolvency Service, said: “The Bounce Back Loan scheme was set up to support businesses in genuine need during the pandemic, and David McGuinness clearly abused it by making false declarations to his company’s bank.
“This lengthy disqualification is a sign that we take such abuse extremely seriously and will act to tackle wrongdoing by these directors.”