Insolvency Service: Slice of History, Madam?

Posted on Sep 06, 2023. by NTI

With all this heat, crumbling schools, Liz Truss's anniversary, flight chaos and Birmingham going bust you could be forgiven to have missed our sector's own little slice of history yesterday (Tuesday 5 September). 

It was announced that the Insolvency Service has disqualified Marian Ghimpu, a 58-year-old director from Croydon, for 13 years and ordered him to repay over £50,000 to the public purse. The action follows Ghimpu's fraudulent use of the Bounce Back Loan scheme during the pandemic. Ghimpu was ordered to pay a compensation order of £52,163 and was given five weeks to pay this, to ensure the taxpayer has not lost out.

The compensation order, issued on 25 July 2023, is the first of its kind secured by the Insolvency Service in court. The 'historical part' is that this is the first compensation order secured in court to repay taxpayer-backed Bounce Back Loan fraudulently secured during the pandemic. The Insolvency Service's parents are so proud.
The facts of the case are very recognisable, but remind us of a time when we were banging saucepan lids and standing patiently in queues for jabs. In October 2020, Ghimpu secured a £50,000 loan for his inactive company, Deea Construct Ltd, despite being eligible for only £2,000. Ghimpu later transferred over £40,000 to himself and withdrew the rest in cash. It sounds very bad, but in fact is not so very different from hundreds of similar such activities that bespeckled 2020 and parts of 2021.

Deea Construct only managed £4,000 in small transactions during summer in 2019, but Ghimpu told his bank the company’s turnover was £200,000. The company went into liquidation in April 2021, but the liquidator was unable to recoup the BBL money. The Insolvency Service has indicated that this case sets a precedent, as they plan to seek further compensation orders and disqualifications in similar cases of abuse by company directors.

In other words, directors, we are coming to get you, your Rolexes, beachside villas, electric cars and make you pay.

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