(Provided courtesy of The Insolvency Service)
Brendan Michael Gaughan, 40, from Glasgow has been disqualified as a director for 12 years, after using his companies to take out Bounce Back Loans totalling £135,000 that the companies were not eligible for.
Gaughan was director of three separate property management companies, Gaughan Group Ltd, Gaughan Property Ltd, and Rentl Property Ltd. They were only incorporated in February 2020 and did no business until April 2020.
As a result, they were not eligible for funds through the Bounce Back Loan (BBL) scheme, which was available only to firms that had been doing business on 1 March 2020.
However in May 2020, Gaughan Group received a BBL of £50,000, Gaughan Property received a BBL also of £50,000, and Rentl Property Ltd received a BBL of £35,000.
Gaughan transferred all the funds into a single account and proceeded to use the money to buy a property on Warden Rd in Glasgow for over £115,000 in August 2020. He then sold the property in March 2021 for just over £120,000, and on the same day transferred £100,000 of the proceeds to his personal account.
All three companies were put into liquidation on 11 October 2021, which triggered an investigation by the Insolvency Service.
The Secretary of State accepted disqualification undertakings from Brendan Michael Gaughan, after he did not dispute that none of his companies had been eligible for Bounce Back Loans. He has been banned for 12 years, effective from 27 October 2022. He has separately agreed compensation with the Insolvency Practitioner.
The disqualification undertakings prevent him from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Steven McGinty, Investigation Manager at the Insolvency Service said:
Bounce Back Loans were made available for trading companies adversely affected by the pandemic. Brendan Gaughan should have known his companies weren’t entitled to the loans yet he took them anyway and used the funds for personal gain.
We will not hesitate to take action against directors who have abused Covid-19 financial support like this.