Thursday, December 26, 2024

Lincolnshire eel protection business shut down after loan abuse

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  • The Eel Screen Company Ltd. provided a false turnover to secure a £50,000 Bounce Back Loan in 2020, the maximum allowed under the scheme which was designed to support businesses during the pandemic 

  • Financial inconsistencies were also found in the company’s application for a £225,000 Recovery Loan Scheme loan almost two years later 

  • Investigations by the Insolvency Service have resulted in The Eel Screen Company being wound-up in court 

A Lincolnshire eel protection business has been closed down after investigations by the Insolvency Service revealed two cases of government loan misconduct. 

The Eel Screen Company Ltd, based on Dolphin Road in Boston, was wound-up at the High Court in Manchester on Tuesday 2 July. 

The company provided inaccurate and inconsistent information when it applied for a £50,000 Bounce Back Loan in 2020 and a £225,000 Recovery Loan Scheme payment in 2022. 

David Hope, Chief Investigator at the Insolvency Service, said: 

Our investigations revealed concerns that The Eel Screen Company was being used as a vehicle to fraudulently obtain significant, government-backed loans during the pandemic.

Bounce Back Loans in particular were made available for trading businesses adversely affected by Covid and were issued based on what should have been accurate financial statements.

The Insolvency Service will not hesitate to apply to have companies wound-up in the public interest in such cases.

Insolvency Service investigations into The Eel Screen Company began in August 2023. One of the former directors of the company told investigators that the business was involved in the installation of screens to protect eels in rivers. 

A second director of The Eel Screen Company said it had since moved into drainage and most recently the construction business. 

The Eel Screen Company obtained a £50,000 Covid Bounce Back Loan in May 2020, claiming an annual turnover of £320,000 for 2019. 

Analysis of The Eel Screen Company’s bank account showed a turnover of just over £49,000 for that year. 

No loan repayments were made despite this being a condition of the scheme. 

The Eel Screen Company followed this misconduct up with a £225,000 application in January 2022 under the Recovery Loan Scheme, which supports small and medium-sized businesses to access the finance they need to grow and invest. 

Insolvency Service investigators found inconsistencies in the accounts and VAT returns submitted as part of the application as well as bank statements that appeared not to be genuine. 

Of the £225,000 The Eel Screen Company received, £148,000 was withdrawn as cash. 

The Eel Screen Company only made one repayment under the loan agreement to date, with £213,750 plus £30,726 in interest outstanding. 

Current and former directors of The Eel Screen Company also failed to produce accounting records on request to the Insolvency Service. 

The Official Receiver has been appointed as liquidator of the company. 

All enquiries concerning the affairs of the company should be made to the Official Receiver of the Public Interest Unit: 16th Floor, 1 Westfield Avenue, Stratford, London, E20 1HZ. Email: piu.or@insolvency.gov.uk

Further information 

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