Two directors of a recycling company based in Devon have been disqualified for 10 years and a third director for eight years for using misleading bank statements to obtain a £250,000 loan by false pretences, following an investigation by the Insolvency Service
Frederick Bartlett and Clive Tayton face 10 year bans, while Aaron Custance has been disqualified for eight years. All were directors of Bionova Recycling Ltd in Okehampton, which was involved in selling and installing equipment for converting food waste into biofuel.
The company went into administration in April 2014 and the administrators have received creditors’ claims of £970,000.
Bionova Recycling borrowed £250,000 in 2013. It was a condition of the loan that the company had to put up the same amount in matched funding and this is what the directors told the lender it had done.
To create evidence that they had invested £250,000, the directors borrowed £50,000 from an associate and passed it repeatedly through the company’s bank accounts before paying it back.
The directors then used bank statements showing all the receipts-- but not the repayments--to persuade the lender that the required matched funding had been introduced, but in reality the directors had introduced no matched funding at all. The lender made the loan, the company subsequently failed and the lender never got its money back.
The loan fund that the directors deceived comprised public funds including European, local authority, British Business Bank and central government funds as well as private investment funds.
Bartlett’s wife Marilyn accepted a three-and-a-half year disqualification relating to a false loan application at a separate company.
She had been a director with her husband of another company, Nergetic Renewables Ltd, in which £50,000 was obtained in a similar manner from the same lender. Nergetic Renewables Ltd, a waste and recycling consultancy based in Hampshire, went into compulsory liquidation in November 2014 with liabilities to creditors of £69,000.
Sue MacLeod, chief investigator of insolvent investigations, Midlands & West at the Insolvency Service, said: ‘These are serious cases in which the directors deliberately misled the lender into making loans that it would not have made if it had known the companies’ true positions. The directors made misrepresentations that they had introduced money into the companies when in fact they had not.’
