A company, based in Manchester, wrongly claimed £50,000 of support during the Covid-19 pandemic. This was claimed through the ‘Eat Out to Help Out’ scheme and the furlough scheme.
The Takeaway Case
The takeaway boss who wrongly claimed this financial support was Ifraz Nabi, 41. Because of the wrong claim, he has been disqualified as a director for 7 years. He claimed £30,000 through the Eat out to Help Out Scheme, and over £20,000 through the Coronavirus Job Retention Scheme.
The chicken takeaway shop in Greater Manchester was located on Stockport Road. Ifraz was the sole director of New York Krispy Fried Chicken. The company behind the business, New York Krispy Fried Chicken Limited, went into liquidation in November 2020. This liquidation triggered an investigation by the Insolvency Service.
The Investigation
Investigators from the Insolvency Service uncovered that Mr. Nabi failed in his obligations, as a director, to maintain good financial records and accounts. In turn, this meant that claims made through these government support schemes couldn’t be supported. The investigation showed that there was insufficient information relating to the company’s sales. Therefore, how much, in fact, sales were affected whilst staff were on furlough.
Even though there were records that permitted the claim under the Coronavirus Job Retention Scheme, which meant that companies could pay staff who were furloughed whilst businesses were closed. The takeaway was not eligible to claim funding through the Eat Out to Help Out Scheme, as this was only for restaurants and takeaways that had indoor seating. Under the scheme, takeaways with no seating at all were excluded.
But, as Mr. Nabi’s takeaway had some seating, it received most of its orders through an app, and this was excluded under the scheme.
The director of New York Krispy Fried Chicken also failed to register the company for tax. So, when the business went into liquidation, the liquidators were unable to assess how much money the business owed in unpaid tax.
The Secretary of State for Business, Energy, and Industrial Strategy accepted the disqualification undertaking from Mr. Nabi. This was after he admitted to failing to maintain & preserve adequate financial and accounting records. Plus not registering for VAT as required.
The disqualification prevents Mr. Nabi from being either directly or indirectly involved in the formation, management, or promotion of a company, without permission from the court. The disqualification of Mr. Nabi was effective from 31st May 2022.
About the author
Iain Bould
Iain heads Beeston Shenton’s commercial litigation department.
Iain has 30 years of experience in Commercial Debt Recovery and Insolvency fields having worked in both Private Practice and Industry and has extensive experience working across all industry sectors and has particular expertise in working with Insolvency Practitioners in advising and recovering outstanding insolvent company ledgers.
Iain brings a pragmatic and commercial approach.
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