£50,000 Covid loan given to Wolverhampton business with just £2,000 turnover

Inderjit Singh Dadial, of soft drink company Cali Juices, has now been banned from running a business for nine years.

The 32-year-old was the sole director of the business, which was incorporated in 2019 with its registered address first in Warstones Road in the Penn area of Wolverhampton before it was changed to Dudley Road.

In June 2020, Dadial successfully applied for £50,000 through the Bounce Back Loan scheme - the maximum amount available through the Government initiative which was exploited by fraudsters across the country.

In order to claim the £50,000, Dadial said his company had turned over £250,000 when the true figure in accounts ending January 2020 was just over £2,000, the Insolvency Service found.

Dadial was listed as the only employee of the company, which is now registered in Droitwich.

He was granted the loan, guaranteed by the Government and interest free for the first 12 months, despite not actually being eligible for any money based on the company's real accounts and the income in its bank accounts.

Dadial has now admitted grossly inflating the company’s turnover to secure the Bounce Back Loan and has been banned from running a company for nine years from March 21.

The disqualification prevents him from directly, or indirectly, becoming involved in the promotion, formation or management of a company without the permission of the court.

It comes two months after the Treasury confirmed that it wrote off £4.3 billion worth of the £5.8bn of fraud witnessed across its Covid business loan schemes.

Former Treasury minister Lord Agnew resigned from his role in January in anger over the handling of fraudulent coronavirus loans and has since slammed the Treasury’s anti-fraud efforts as a ‘Dad’s Army’ operation

Dave Elliott, chief investigator at The Insolvency Service, said the Dadial case was proof it was tracking down fraudsters.

He said: "Inderjit Singh Dadial had significantly inflated the turnover on the application to obtain a loan to which Cali Juices Limited was not entitled.

"The Insolvency Service will not hesitate to investigate and use its powers against those who have abused the Covid-19 support schemes.

The scheme Bounce Back Loan scheme allowed small and medium-sized businesses to borrow between £2,000 and up to 25 per cent of their turnover.

The government guaranteed 100 per cent of the loans, which were interest free for the first 12 months at which point the rate rose to 2.5 per cent a year.