Rotherham “Directors” Banned After Fraudulently Claiming £200,000 of COVID-19 Financial Assistance
Two men who set up fake businesses to fraudulently claim a total of £200,000 in emergency Covid loans have been banned from running companies. Muneef Ihsan, 26, accepted £150,000 of government cash, whilst Mahir Towid Ul Haque, 21, received a £50,000 loan.
Between 2019 and 2020, Muneef Ihsan was listed as the director of three different companies: Porthart Ltd, Bargain Basement 90 Ltd, and Bargains Basement 90 Ltd. All three companies were registered at the same residential address in Rotherham and were each placed into voluntary liquidation by Ihsan in September 2020.
The liquidations triggered an investigation by the Insolvency Service, which found Ihsan opened a bank account for each company in June, after the pandemic began, for the sole purpose of fraudulently obtaining three £50,000 COVID-19 Bounce Back Loans (BBLs).
The BBL scheme enabled smaller businesses to access finance more quickly during the pandemic but closed to new applications on 31 March 2021. The scheme offered loans between £2,000 and £50,000, and so both Ihsan and Ul Haque fraudulently claimed the maximum loan.
Upon receiving the loans, Ihsan withdrew £24,342 in cash from the companies. He then began transferring the remainder of the BBL funds to other people, including “close friend” Mahir Towid Ul Haque, said the service.
Ul Haque was appointed director of Hiitness Ltd in May 2020, which was purported to be an online sports retailer. An investigation by the Insolvency Service later uncovered that Ul Haque opened a bank account for the company in June 2020 and took out a £50,000 COVID-19 Bounce Back Loan.
Following a similar blueprint to Ihsan, Ul Haque placed his company into voluntary liquidation in November 2020, but not before he purchased a Rolex watch, transferred £16,050 to his personal account, withdrew £8,410 in cash, and transferred £12,500 to other parties.
The men were made subjects of disqualification undertakings, equivalent to a disqualification order but without court proceedings. Ihsan was handed a 13-year ban whilst Ul Haque was banned for 6 years, meaning the pair cannot – directly or indirectly – be involved in the promotion, formation, or management of a company without the permission of the court for that length of time. Although it is understood that the money has not yet been recovered, the two men could face attempts to retrieve it.
Robert Clarke, Chief Investigator for the Insolvency Service, stated: “Abuse of Covid-19 support schemes, which have provided essential financial assistance to millions by helping businesses trade during the pandemic and protecting jobs, cannot be tolerated. The Insolvency Service has sent out a clear message that where a company is being used to facilitate fraudulent activity, action will be taken to remove the directors from the corporate arena for a lengthy period of time.”
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