Restaurant Owner Banned for 12 Years Over £48,000 Eat Out to Help Out Fraud
Posted by Emma on 16th Aug 2024
In a significant ruling, the former owner of Bengal Tandoori Lichfield Limited in Staffordshire has been disqualified from serving as a company director for 12 years. The ban follows revelations that Belal Ahmed, aged 59, submitted false claims to exploit the government's Eat Out to Help Out scheme during the height of the COVID-19 pandemic.
Ahmed, who operated the Indian restaurant on Bore Street, Lichfield, was found to have claimed nearly £50,000 more than he was entitled to under the scheme in August 2020. This initiative, introduced by then-Chancellor Rishi Sunak, was designed to bolster the struggling hospitality industry by offering customers a 50% discount on meals, which businesses could reclaim from the government.
An investigation by the Insolvency Service revealed that Ahmed submitted claims amounting to £56,500 despite bank records showing in-house restaurant sales of just £8,055 during the qualifying period. This discrepancy highlighted that Ahmed had fraudulently claimed at least £48,445 more than he was eligible for.
Further scrutiny uncovered that Ahmed had also overstated his restaurant's turnover by nearly threefold to secure a £50,000 Bounce Back Loan just two months earlier. Claiming an annual turnover of £420,000, Ahmed obtained the maximum loan available under the scheme. However, investigations showed that Bengal Tandoori Lichfield's turnover was closer to £150,000, making the company eligible for a loan of only £37,500.
Ann Oliver, Chief Investigator at the Insolvency Service, condemned Ahmed's actions, stating, "Belal Ahmed provided misleading information to secure funds from not just one, but two Covid support schemes during 2020. Tackling Covid support scheme abuse is a key priority for the Insolvency Service. Behaviour represents a serious breach of the standards expected of company directors, which is why he has been disqualified for the next 12 years."
The Secretary of State for Business and Trade, Jonathan Reynolds, accepted Ahmed's disqualification undertaking, effective 7 August. This ban prohibits Ahmed from being involved in a company's promotion, formation, or management without court permission.
The financial troubles for Bengal Tandoori Lichfield did not end there. The company was liquidated in June 2021, leaving creditors with unpaid debts exceeding £121,000. Despite the restaurant's security, a new business named Bengal Indian Restaurant & Takeaway operates at the same address. However, Ahmed is not listed as a director.
Though well-intentioned, the Eat Out to Help Out scheme has been plagued by instances of fraud. A parliamentary committee was informed in 2022 that nearly £70 million had been claimed fraudulently or in error during the scheme, representing almost 10% of the total funds disbursed by the government. Other cases include a Manchester takeaway owner who falsely claimed £50,000 and a café owner in Yorkshire who was jailed for attempting to defraud over £430,000.