Investment group backed by ex-Tesco boss probed over allegations of £2m Covid loan misuse
We Are Nova, a start-up investment group with support from ex-Tesco chief Sir Terry Leahy, is being probed over claims it misused Covid loans.
According to The Times newspaper, companies associated with We Are Nova netted almost £2m through the government’s bounce back loan scheme. However, the firms did not seem to be eligible for the funding.
The group and businesses on its rosta claimed multiple loans worth £50,000 each, which would require a turnover of at least £200,000 in 2019.
What’s more, firms had to have sales of at least £8,000 in 2019 to qualify for the government’s rescue cash scheme.
The Times found that dormant and shell firms were used to take money from the scheme, after reviewing more than 100 businesses connected to We Are Nova.
Some 38 companies in total connected to Nova were suspected to have secured loans worth a total of £1.9m.
The government’s Insolvency Service was reported to be investigating the Liverpool-based company’s use of the loan scheme.
A Nova spokesperson told The Times: “Nova is compliant with the law, so any allegation of illegality is denied in the strongest possible terms.
“None of the loans are in default and, in any event, an undertaking to repay has been provided by [Nova’s holding company] should a default occur. So the loans should ultimately never cost taxpayers anything.”
Barclays provided nearly all of the credit to Nova-linked companies, with the firm telling the newspaper that loans were granted without advice and borrowers pledged their eligibility without guidance.
However, We Are Nova insisted its borrowing and use of emergency cash was not outside the rules of the scheme and Barclays was fully aware of each borrower’s trading and banking history.