A pizza boss has been handed an eight-year director disqualification for failing to maintain adequate records to explain how a £50,000 bounceback loan was used.

Following Kleida Pizzeria's entry into creditors' voluntary liquidation, the Insolvency Service began investigations in to the Company's financial affairs. The books and records of the company proved to be inadequate to explain an income into the company's bank accounts of £650,000 or expenditure of £736,000 - equally concerningly, it was noted that the company had applied for (and received) a bounceback loan of £50,000 in May 2020 which was paid back out of the company's account to an unknown source just 7 days later...  It is not known where the funds ended up or who has ultimately benefitted from the payment.

The director of Kleida Pizzeria failed to engage with the liquidator or the Insolvency Service in relation to their investigations, didn't appear in court and has not provided an explanation for the whereabouts of the funds.  He has since been handed down an eight-year director disqualification which is welcomed news, but doesn't help creditors of the company (which include the government) with the recoverability of sums due to them.

Even genuine applications for bounceback loans (by which I mean, struggling businesses who genuinely intend to utilise the funds to help them get back on their feet post-covid) have a risk of being lost to a business which does not ultimately repay the loan because it simply cannot recover from the hit they took during the pandemic.  However, when we see reports such as this (and others like this) where loans were (apparently) fraudulently sought and not used appropriately, you have to question the ultimate cost of the "quick and easy" model which the bounceback loan scheme sought to provide.