Former Dundee Pub Boss Banned for Misuse of Covid Bounceback Loans
The misuse of Covid bounceback loans has been a hot topic since the pandemic hit, and a recent case involving a former Dundee pub boss has brought this issue to the forefront once again. Philip Donaldson, 41, has been banned from acting as a company director for 11 years by The Insolvency Service due to his misuse of these loans.
Donaldson, a director of Macmerry 300 Ltd, secured two £50,000 loans intended for pandemic recovery, which he then transferred to other areas of his business. The Insolvency Service found that he was ineligible for the loans, as only one loan was available to businesses, and he failed to use the funds for their intended purpose.
The Insolvency Service stated that Donaldson “knew or ought to have known the company was not eligible for” the two loans totaling £100,000. They also mentioned that businesses which originally borrowed less than the maximum amount available to them under the scheme were eligible to top-up their original loan, but the total loan amount was not to exceed 25% of the business’s turnover.
Donaldson applied for the first BBL of £50,000 on behalf of Macmerry in May 2020 with one bank, and the following day he applied for a second BBL for the same amount from a different bank. He signed a declaration confirming that Macmerry had not applied for or received any other BBL when applying for the second loan.
Two transfers totaling £47,739.93 were made from one bank to another account held by Macmerry, with £39,500.05 representing BBL funds. Donaldson failed to provide any information regarding the beneficiary of these transfers or how they were ultimately disbursed. The total liabilities at liquidation amount to £1,166,926, with £100,000 relating to amounts owed in respect of the two BBLs.
Macmerry 300 collapsed in 2022 as a result of these actions. This case serves as a reminder of the importance of using financial assistance for its intended purpose and the consequences of misusing such funds. It also highlights the need for stricter regulations and oversight when it comes to distributing government aid during times of crisis.
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