Coventry-based Mafuwer Logistics, which provided services for Amazon, has had its license revoked after it was found the business had wrongly taken out a bounce-back loan.
The West Midlands Traffic Commissioner, Nick Denton, recently held a public inquiry into Mafuwer Logistics and has warned other operators that they too could be sanctioned if they were guilty of misusing the government’s pandemic relief loan schemes. Mafuwer Logistics had been granted a standard international license for three vehicles in December 2020.
The inquiry found that Mafuwer Logistics had applied for a bounce-back loan despite its turnover falling far below the threshold to qualify. The business had a sole director Harun Omar, who appeared at the inquiry.
The inquiry heard that almost all the company’s financial resources had been provided by a £50,000 taken out in May 2020. But, the company’s turnover was far below the £200,000 necessary to qualify for such a loan – the maximum permissible for a bounce-back loan was 25% of turnover or £50,000, whichever is the lower.
Denton also noted that the company’s bank statements, provided as evidence of financial standing, contained “an unusually large number of items which seemed to constitute personal use of funds by the director.”It was also found that the company had a poor maintenance record and numerous tachograph infringements. The commissioner found that the business did not have good repute or financial standing and therefore revoked its license.
Denton said: “This is not the first case I have come across where a bounce-back loan appears to have been improperly obtained. I know that at the height of the pandemic banks did not always have the opportunity to check whether applicants qualified for the level of loan applied for. Nevertheless, if I find that companies or individuals have been untruthful about their turnover when applying for a loan, I will draw adverse conclusions about good repute.
“I also warn against the tendency I have seen in some companies to fund personal expenditure from the company’s accounts. Directors may withdraw money from the company in only three ways: salary, dividends, or a properly documented director’s loan (which must be repaid). They can’t just use the company debit card to fund personal shopping, holidays, etc. This is tax evasion and will harm good repute.”