£50,000 Loan Fraud Lands Gillingham Businessman in Extended Bankruptcy
Posted by Emma on 14th Feb 2025 Reading Time:
A former Chinese takeaway owner in Gillingham has been banned from acting as a company director after wrongfully claiming a £50,000 Bounce Back Loan during the Covid pandemic. The 55-year-old Mr Zhongqing Li from Parkwood Green applied for the loan in June 2020 to support his Silver Sea Chinese takeaway business. However, official investigations revealed that he was not entitled to receive any funds under the government-backed scheme.
Under the rules of the Bounce Back Loan initiative, businesses were required to have been trading on or before 1 March 2020. Yet, on 14 June 2020—just one day before submitting the loan application—Mr. Li had signed a VAT registration form stating that Silver Sea began trading on 17 May 2020. This direct contradiction meant that, according to the Official Receiver, the business did not meet the necessary criteria.
Despite securing the maximum loan amount, Mr Li went bankrupt in June 2024, still owing the entire £50,000. The Official Receiver, charged with examining the causes of his bankruptcy, discovered the irregularities in the trading dates and commenced proceedings against him. As a result, Mr. Li did not dispute that he had claimed the loan under false pretences.
In response, the Official Receiver secured a Bankruptcy Restrictions Undertaking (BRU) against Mr. Li, thereby extending the standard 12-month bankruptcy restrictions by nine years. Consequently, he is prohibited from acting as a company director without court permission, and he is also barred from holding certain public roles or borrowing sums over £500 without declaring his restrictions. The Secretary of State for Business and Trade formally accepted Mr Li’s undertaking on 28 January 2025, and these conditions will remain in force until 27 January 2034.
According to the Insolvency Service, the Silver Sea takeaway operates under different owners. Investigations are ongoing to determine whether the misappropriated funds can be recovered. Samantha Crook, Deputy Official Receiver at the Insolvency Service, stated that the Bounce Back Loan scheme was designed to help existing businesses weather the impact of the pandemic and that such misuse of public funds would not be tolerated. The service remains committed to imposing the toughest sanctions on those who attempt to abuse government support programmes.