Former owner of Chinese takeaway in Kent claimed maximum loan for business which was not eligible for any money
The former owner of a Chinese takeaway in Kent is subject to stringent sanctions after taking out a £50,000 Bounce Back Loan during the Covid pandemic when the business was not entitled to any money under the scheme.
Zhongqing Li, 55, from Parkwood Green, Gillingham, applied for the loan in June 2020 to support his Silver Sea takeaway, which also traded from Parkwood Green.
Li became bankrupt in June 2024, owing the full amount of the loan.
The Official Receiver, whose duty includes investigating the cause of a bankruptcy, discovered that Silver Sea had not been trading within the required timeframe to have been eligible for a Bounce Back Loan.
Samantha Crook, Deputy Official Receiver at the Insolvency Service, said:
Li made a loan application on 15 June 2020 in which he stated that Silver Sea had been trading on 1 March 2020 – the date businesses had to have been trading to qualify for a loan under the rules of the scheme.
But the Official Receiver discovered that the day before he applied for the loan, Li had signed a VAT registration form saying the business had only begun trading in the previous month, on 17 May 2020.
The Official Receiver secured a Bankruptcy Restrictions Undertaking (BRU) from Li, in which he did not dispute that he had obtained a £50,000 Bounce Back Loan to which he was not entitled because he was not trading on or before 1 March 2020, as required by the terms of the scheme.
He agreed to abide by sanctions that restrict his finance and business activities, and extend the original terms of his bankruptcy – usually a 12-month period – for another nine years.
The restrictions prevent him acting as a company director without permission from the court, and from holding certain roles in public organisations. He is also prohibited from borrowing more than £500 without declaring he is subject to the sanctions.
The Secretary of State for Business and Trade accepted the undertaking from Zhongqing Li on 28 January 2025. He will be subject to the restrictions until 27 January 2034.
The Silver Sea takeaway continues to trade under different owners.
The Official Receiver continues to make enquiries into possible recovery of the money.
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