Investigations by the Insolvency Service are uncovering the scale of deception by some company directors during the COVID-19 pandemic.

In September 2023, Grisha Valchev, a director of Healthy & Tasty Ltd, was found guilty of abusing the Bounce Back Loan scheme. In May 2020, Valchev gave false information to claim the maximum Bounce Back Loan amount of £50,000.

With an actual company turnover of £39,400, Valchev was eligible for less than £9,000 (25% of the company’s turnover in 2019). In July 2021, Healthy & Tasty Ltd went into liquidation which triggered the investigation.

The result of the investigation issued a compensation order to Valchev to repay £43,570 which included the excess amount that he had falsely claimed, plus interest. He was also disqualified as a company director for 9 years.

The Insolvency Service has also shared details of other cases where directors are being held to account for their abuse of the financial support put in place during the pandemic. Each of them claimed £50,000 in Bounce Back Loans:

• Ivan Hristov Fratev was the sole director of Chingford-based BI&F Ltd. He closed his company within two weeks of receiving his Bounce Back Loan, failing to notify his lender.
• Bradley Malone was the sole director of ONENETPRINT Ltd. He stated his company turnover in 2019 was £200,000 to achieve the full £50,000 Bounce Back Loan when in fact the turnover for the previous year was £90,200. He overclaimed £27,400.
• It was a similar story for Ryan Moir, sole director of Croxton Group Ltd. He claimed the company turnover was £250,000 when it was actually £21,000. His fraudulent claim meant he received almost 10 times more than he should have. In May 2022, the company went into liquidation owing over £184,000, including the Bounce Back Loan.

All three directors were disqualified as company directors for between 6 and 10 years.

Without doubt, we’ll continue to hear of more convictions over coming months as the Insolvency Service continues its investigations – it’s what we predicted earlier this year. Over 1.4 million businesses took out a bounce back loan and the Insolvency Service is intent on identifying those who took advantage of the support to hold them accountable.

Any company director concerned about a company closing as a result of insolvency should always seek professional advice as soon as financial issue are becoming unresolvable. Our team is always here to help – call 0808 196 8676 or email help@trusolv.co.uk