A Blackburn businessman has been banned from being a company director for six and a half years after fraudulently claiming Covid-19 bounce back loans.

Mohammed Sultan Khan, 28, who was a director at Cannel Works Trading Limited, a wholesale trade firm, overstated his firms turnover by almost 4,000 per cent in order to obtain bounce back loans totalling £47,500.

His company then went bust having paid back none of the loan and with more than £25,000 in liabilities.

According to the Insolvency Service, Khan’s last known address was in Blackburn Road, Great Harwood, while Cannel Works’ registered office address was in York, according to Companies House.

Founded in 2015, the firm was called MSK Prestige from 2015 to 2019, and then MSK Leasing from 2019 to 2020, before it then became Cannel Works Trading.

To support businesses during the Coronavirus pandemic, the Government set up the Bounce Back Loan scheme, where businesses could get a loan of between £2,000 and £50,000, subject to a maximum of up to 25 per cent of turnover in the calendar year 2019.

Khan obtained a bounce back loan for Cannel Work on May 5, 2020, of £45,000 and a further loan of £2,500 on November 17, 2020.

In the application form for the loan, he had stated Cannel Works’ turnover was £190,000, when in reality accounts for the period from July 1, 2018, to June 30, 2019, showed a turnover of £4,737.

The amount he had stated in the form was 3,911 per cent higher than the real figure.

VAT returns from January 1 to June 30, 2019, showed a total value of sales of £4,112, and from July 1 to December 31 in the same year the total value of sales was £11,639.

On the real figures, the amount Khan’s company would have been eligible for was nowhere close to the £47,500 it did get.

On March 30 last year, Cannel Works then entered liquidation. It had total liabilities of £73,588, of which £47,500 was in respect of the bounce back loan, showing not a single penny of the loan had been repaid.

Khan has now been disqualified from being the director of a company for six years and six months by the Insolvency Service; the ban came into force on November 1.