UK Bans Indian Restaurant Owner for Covid Loan Scheme Exploitation

England, the owner of Chutneys Indian restaurant, Zaman Shaa, faced legal consequences for misusing a Covid Bounce Back Loan. Shaa, operating under Shaa Ventures Limited, applied for the loan while violating company law. Before securing the loan, he applied to dissolve his business, which had been trading in the preceding three months. This violation led to a suspended 36-week prison term, along with a two-year ban as a company director, and a £6,000 cost order. The court found that Shaa unlawfully transferred funds into personal accounts, engaged in overseas remittance, and withdrew substantial amounts in cash.

Zaman Shaa's actions were deemed exploitative of a scheme designed to aid businesses during a national emergency. The Chief Investigator at the UK’s Insolvency Service, Pete Fulham, emphasized that Shaa's actions required planning and sophistication over several weeks. The severity of the sentence and disqualification underscores the commitment to take decisive action against those abusing Covid financial support.

In addition to the two-year director disqualification, Shaa was ordered to pay £6,000 in costs, with a monthly payment plan. The court's decision prevents him from prticipating in the promotion, formation, or management of a company without court permission until February 2026.

The court heard that Shaa had applied for a £30,000 Bounce Back Loan in August 2020. His failure to inform creditors about his company's dissolution application, coupled with the misuse of loan funds, constituted violations of UK company law.

Shaa's disqualification encompasses charges related to unlawful application for voluntary strike-off, failure to inform a creditor of the striking-off application, and fraud by false representation. Despite no longer being associated with Chutneys Indian, Shaa's case serves as a cautionary tale, highlighting the UK's commitment to maintaining integrity in financial support programs and holding individuals accountable for exploiting such initiatives.

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