A GLASGOW man has been disqualified as company director after he had made false claims in order to receive loans for his businesses.

Shahzad Arshad, 43, was the director of two companies which traded from Dougrie Drive, Castlemilk.

Town Discount Ltd was incorporated in January 2020 and began trading a month later as a retailer of games, toys, clothes, watches and jewellery, until it went into liquidation in December 2021.

Meanwhile, Naz Accessories was incorporated in December 2017 and traded as a clothes retailer until it went into liquidation in January 2022.

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Arshad applied for Bounce Back Loans for the two companies during the Covid-19 pandemic in 2020.

Both companies received the maximum £50,000 loans based on Arshad’s application but later went into liquidation owing a total of more than £106,000, including around £93,400 that was owed for the Bounce Back Loan.

This triggered an investigation by the Insolvency Service.

It was found that Arshad had made a false claim about Town Discount Ltd’s turnover, as it had only begun trading in February 2020. It was therefore not entitled to any funding through the loan scheme.

It was then discovered that Naz Accessories Ltd’s true turnover meant the maximum loan it could have claimed was £24,500.

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Investigators also found that between June 2020, when Town Discount Ltd received the loan, and August 2020, £16,000 had been withdrawn from the company bank account in cash, and the remainder of the loan money was paid out to expense and trade creditors.

But Arshad had been unable to prove that the money had been used to provide an economic benefit to the business, as per the rules of the scheme.

Steven McGinty, investigation manager at the Insolvency Service, said: “Bounce Back Loans were an emergency measure made available to help British businesses trading through the most testing of times.

“Arshad should have known his companies weren’t entitled to the loans, yet he took them anyway.

“This abuse of government support has led to lengthy bans and should serve as a warning to others that we will not hesitate to take action against directors who have abused Covid-19 financial support.”