Philip Donaldson, 41, a director of Macmerry 300 Ltd, secured two £50,000 loans intended for pandemic recovery, which he then transferred to other areas of his business. The Insolvency Service found he was ineligible for the loans, as “only one loan was available to businesses”, and failed to use the funds for their intended purpose.

The Insolvency Service explained in a statement that Mr Donaldson “knew or ought to have known the company was not eligible for” the two loans totalling £100,000.

“Mr Donaldson failed to ensure the BBL funds were used in the entirety for the economic benefit of the business,” according to the statement, adding “businesses which originally borrowed less than the maximum amount available to them under the scheme were eligible to top-up their original loan, however the total loan amount was not to exceed 25% of the business’s turnover”.

Mr Donaldson applied for the first BBL of £50,000 on behalf of Macmerry, on 07 May 2020 with bank A. The following day he applied for a second BBL for the same amount, but from a different bank (bank B). When applying for the second loan, Mr Donaldson signed a declaration confirming that Macmerry had not applied for or received any other BBL.

The Insolvency Service detailed: “On 15 June 2020, two transfers amounting to £47,739.93 were made from bank A to another account held by Macmerry, of which £39,500.05 represented BBL funds.

“Mr Donaldson has failed to provide any information regarding the beneficiary of these transfers or how they were ultimately disbursed. Total liabilities at liquidation amount to £1,166,926 of which £100,000 relates to amounts owed in respect of the 2 BBLs.”

Macmerry 300 collapsed in 2022.