Former Burnley businessman used Covid loan to renovate house

Fraudster Sajil Khan, 35, falsely applied for government Bounce Back Loans for his business, Khan Management Limited, on six occasions in 2020, totalling almost £250,000.

The business was previously registered at an address in Colne Road, Burnley, and was first incorporated in March 2017.

Once the money was deposited into his company bank account, he would then transfer it to a personal account, and continue applying for loans to pay off the previous one.

Khan would also falsely inflate his business’ turnover on the loan applications in order to receive the maximum loan of £50,000.

Bounce Back Loans were introduced in 2020 during the Covid-19 pandemic to help small businesses that were affected by the lockdowns.

Businesses could apply for loans if they were not already in the process of applying for a loan, if it was not bankrupt or in liquidation, and only to provide an economic benefit for businesses.

The maximum loan of £50,000 would require a company to have an annual turnover of £200,000 in the previous year.

Roger Brown, prosecuting at Preston Crown Court, laid out six separate times when Khan applied for Bounce Back Loans – the first of which was accepted by the bank and was not being prosecuted in court.

Sajil Khan leaving the court (Image: NQ)

That application was made on May 4, 2020, for a Clydesdale Bank account opened on January 7 of the same year.

Khan applied for a loan of £23,000, claiming his turnover in 2019 was £95,000 when it was in fact slightly below that figure.

The loan was approved three days later and deposited into the account, which already had £1,230 in it. Khan then removed £24,000 from that account into a personal account.

On May 7, Khan was loaned another £48,000 through Clydesdale Bank, declaring his turnover to be £195,000 - £100,000 higher than he stated on the previous application.

He knowingly provided false information by inflating the turnover and having already been granted a previous loan.

This application was refused due to an error in the address, but the offence had already been committed by applying.

The next application was made on May 28 when Khan borrowed £48,000 through a NatWest business account. He claimed his turnover to be £192,000.

The application was granted on June 1, 2020, and on the same day, Khan moved the money into a Halifax personal bank account.

Mr Brown said on this occasion the offences were declaring an inflated turnover, not using the money for business purposes and having previously had a loan.

READ MORE: Blackburn director falsely applied for Bounce Back Loan

Another application was made on June 3, 2020, through the Clydesdale Bank account, with the business turnover claimed to be £200,000.

This was authorised on the same day and paid into the account, and the defendant immediately paid off the previous £23,000 loan granted on May 7.

Mr Brown said these funds were not used to support the business.

A further application was made on June 16, 2020, for £50,000 through an HSBC business account, which the Crown said was with the intention of supporting a further loan.

This money was deposited into the account on July 10. Further examination of the account showed the money was spent on general living expenses and credit card payments, with no evidence of support or benefit to his business.

The final application was made on July 30, 2020, for £50,000 through a Starling Bank account.

Examination of that account indicated expenditure consistent with payments for interior decorating and general living.

Khan, previously of Prairie Crescent, Burnley, but now living in Saudi Arabia where he works as a project manager, has been paying back the loans and was doing so before criminal investigations started.

He has paid around £70,000 back and has around £125,000 outstanding.

He was arrested in February 2023 and provided a prepared statement to police.

He accepted the figures he stated in his applications were 'aspirational' and that the funds were used to renovate a newly purchased house.

Emily Woodside, in mitigation, said there was an “element of this being opportunistic” and it was a “burst of activity” over a few months – noting Khan has not made any more loan applications since.

Ms Woodside said: “The public purse is being replenished and has been for over two years.

“He is committed to clearing his loans. He is doing everything he can to make the situation right.

“In the pre-sentence report, he described it as the worst decision of his life.”

Recorder Kristian Cavanagh, sentencing, said: “Ultimately the money was not used for the business.

“Clearly, some of the money obtained was to pay off previously obtained loans.

“You can’t possibly have needed £200,000 in that short period of time. You’re an intelligent man and you clearly exploited the system.”

Khan was sentenced to 20 months in prison, suspended for 18 months. He must also complete 150 hours of unpaid work.

A hearing under the Proceeds of Crime Act will take place on December 10.