A director of a care recruitment business has been disqualified for seven years after abusing two different Covid loan schemes during the pandemic.
James Ireri was the director of Safi Care Ltd, a recruitment business from Surrey, which supplied staff to care homes, from February 2015 until it went into liquidation in August 2021. The company had first traded as Safi Services Ltd until March 2016.
In May 2020, Ireri applied for a £50,000 bounce back loan – the maximum allowable – for the company. This was a government scheme to support businesses during the pandemic, whereby companies could apply for loans of up to 25% of their 2019 turnover, up to a maximum of £50,000.
However, in August 2020, Ireri applied for £100,000 loan on behalf of Safi Care Ltd, this time from a different lender, and through a different Covid support scheme, the Coronavirus business interruption loan.
Under the rules of the Covid loan schemes, businesses were able to apply for a single loan but not both. A business could obtain a second loan if the money was used to repay the first in full.
When Safi Care Ltd went into liquidation in August 2021, the company owed more than £231,500, including the full amount of both loans.
An Insolvency Service investigation was triggered, but Ireri failed to provide adequate company accounts and investigators could not determine whether Safi Care Ltd had ever been eligible to apply for the bounce back loan, based on the company’s 2019 turnover.
The lack of company books also meant Ireri was unable to prove he had used the loan for the economic support of the business – another condition of the scheme.
Investigators discovered more than £491,300 had been withdrawn from the company bank account between May 2020, when the first loan was received, and July 2021, before Safi Care Ltd went into liquidation, including more than £80,000 for personal spending and around £93,900 of transfers into Ireri’s personal bank accounts.
The secretary of state accepted Ireri’s disqualification after he did not dispute that he had caused Safi Care Ltd to breach the terms of two Covid loans by failing to repay the bounce back loan after obtaining the interruption support, and by not providing adequate evidence of the company’s turnover or how the loans were used.
His ban started on 8 December 2022, and lasts for seven years. The disqualification prevents him from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.
Neil North, deputy head of investigation at the Insolvency Service, said: ‘Bounce back loans and Covid business interruption loans were designed to provide vital support for viable businesses through the pandemic. James Ireri abused not one, but two of these schemes.’