Restaurant owner jailed for using Covid loan then dissolving company

27th March 2024

The owner of a Turkish restaurant, who illegally applied for a Covid Bounce Back Loan and then applied to dissolve his company without informing creditors has been jailed.

Ilhan Kekec was sentenced to two-and-a-half years in prison when he appeared at Isleworth Crown Court. Kekec was also disqualified as a company director for three years. Kekec had denied charges of fraud by false representation and failing to notify creditors of a voluntary strike-off but was found guilty by a jury in December 2023.

Kekec, of Abbotts Drive, Waltham Abbey, Essex, applied for a £30,000 Bounce Back Loan in May 2020, falsely claiming the turnover of this Hizirali Ltd business was £125,000.

Hizirali was set up by Kekec to run the Derwish Kebab Restaurant inside the food court of the East Shopping Centre on Green Street, Forest Gate, London. Kekec had traded for three years through Helosh Ltd as the Derwish Restaurant on St Albans Road, Watford, before opening this second restaurant.

However, his new venture only traded for three weeks before the Covid lockdown, and he was unable to open during that period. Kekec withdrew the Bounce Back Loan money in cash and later admitted to Insolvency Service investigators that he spent the funds on clearing personal debts.

He applied to dissolve his company in June 2020, claiming it was no longer economically viable for him to run the restaurant. However, he deliberately failed in his statutory duty to inform his creditors within seven days of his voluntary strike-off application with Companies House.

Kekec was sentenced to two-and-a-half years each for two counts of fraud by false representation, and two years and four months respectively for offences under the Companies Act, with the sentences to run concurrently. He is now subject to confiscation proceedings which have been scheduled for this year.

Julie Barnes, Chief Investigator at the Insolvency Service, said “Ilhan Kekec saw an opportunity in the early weeks of the pandemic to receive a Covid loan which he never intended to repay. His actions were thoroughly dishonest and at no point did he ever own up to his crimes.

“He will now have the chance to reflect on his behaviour from behind bars.”