The Insolvency Service disqualified 1,036 directors in the last year with just under 80% being linked to Covid loan abuse 

Covid loan fraudsters are frequently being disqualified for abusing the support system set up during the pandemic, so much so that the list of disqualified directors grew to an all-time high. 736 of the 1,036 directors struck off have been linked to Covid loan fraud.

On top of Covid loan abuse the Insolvency Service issued 131 bankruptcy restriction orders, with 87 of these also being linked to Covid fraud.

823 out of the 1,036 directors struck off were in some way involved in abusing the Covid support system set up during the pandemic to help companies through a time of national crisis.

The average length of ban across the total number of disqualified directors was eight years, while the maximum length of time to be disqualified is 15 years, and many also receive orders to carry out unpaid work.

The insolvency Service is frequently publishing information on disqualified directors that abused the Covid support system.

Just today, Mehmet Akyuz, 36, a Sussex based café owner has been disqualified for only five years after fraudulently applying for three Covid loans amounting to £150,000. He was also ordered to complete 300 hours of unpaid work.

Two of the companies that loans were applied for were dormant, but the loans were approved anyway and Akyuz also attempted to close one of the companies so it would not be liable to repay the loan.

The recently appointed Covid counter fraud commissioner, Tom Hayhoe, began work on 3 December and will be in place for one year. There is expected to be a report presented to Parliament with ‘lessons and recommendations of government procurement in the face of future crises’, said the Treasury, although it may be too little too late to recover the millions of pounds stolen through the schemes.

As well as securing Covid bounce back loans when they are not entitled to them, some of these directors have been banned for not paying the right amount of tax or VAT and also failing to file their accounts.

As a disqualified director they cannot have anything to do with setting up new company in the UK, or abroad if it has ties to the UK. They are not allowed to promote a company and also cannot be involved at all with the forming of one even if their name is not attached to it.

Dave Magrath, director of investigation and enforcement services at the Insolvency Service, said: ‘Disqualifications for more than one thousand directors demonstrates the impact our investigative work is having.  

‘Whether it be Covid loan abuse or directors breaching disqualification restrictions, we are consistently tackling misconduct and bringing those responsible to account.  

‘The end result is a reminder to all businesses to operate appropriately, within the law, and helping to protect the public from rogue business and their directors.’