The owner of a Chinese takeaway has been given a lengthy bankruptcy order after claiming maximum covid loan for business which was not eligible for any money
Zhongqing Li, 55, from Gillingham set up the takeaway, Silver Sea located in Parkwood Green, simply to claim a £50,000 bounce back loan when he was clearly not eligible to apply.
While the pandemic was raging, the application was approved by one of the participating banks due to the general lack of checks under the emergency covid scheme. He has now been given a lengthy nine-year bankruptcy order and a director ban for the same period, while the business is owned by a different operator.
Li applied for the loan on 15 June 2020 to support his Silver Sea takeaway, claiming that the business had been trading on 1 March 2020. This was the date businesses had to have been trading to qualify for a loan under the rules of the scheme, which was launched on 4 May by then chancellor Rishi Sunak.
In fact, the day before Li applied for the loan, he had signed a VAT registration form saying the business had only begun trading in the previous month, on 17 May 2020, clearly breaching the qualifying criteria.
When the takeaway owner went bankrupt in June 2024, owing the full amount of the loan, the Official Receiver launched an investigation into the cause of the bankruptcy. At this point, staff discovered that Silver Sea had not been trading within the required timeframe to have even been eligible for a bounce back loan.
Despite taking out the loan four years earlier in 2020, when Li went bankrupt he had paid absolutely none of it back, effectively gaining £50,000 for nothing.
When Li accepted his bankruptcy restrictions undertaking (BRU) he did not dispute that he had obtained the ineligible £50,000 loan, thereby breaching the bounce back rules.
Li was given a nine-year bankruptcy order, extended from the usual 12-month term, restricting his finance and business activities, and banning him from operating as a director until 27 January 2034. He is also prohibited from borrowing more than £500 without declaring he is subject to the sanctions.
Samantha Crook, deputy official receiver at the Insolvency Service, said: ‘The bounce back loan scheme was designed to help keep existing businesses afloat during a time of crisis for the country.
‘Zhongqing Li abused this vital support by claiming the maximum amount possible for a business that was not entitled to receive a loan under the terms of the scheme.
‘The Insolvency Service strives to secure the toughest sanctions for those who abuse public money, and we are pleased these lengthy restrictions will curb Li’s business and financial activities to help protect the public from further harm.’
The Official Receiver said it will continue to try to recover the money. Meantime, the Silver Sea takeaway continues to trade under different owners.
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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
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