An artist with Royal, political and sports celebrity connections has been caught abusing a BounceBack Loan. The Insolvency Service says the case is a warning that there are consequences following disqualification which is a lengthy exclusion from trading with the benefit of limited liability.
The Insolvency Service has reported that artist Darren Baker has abused the Bounce Back Loan scheme by taking a £50,000 loan for his charity that it was not eligible for.
The case highlights the lack of due diligence for Bounce Back loans at a time when legitimate and struggling limited company directors were excluded from support.
Darren Richard Baker, based in Coventry, has been disqualified as a director for 7 years after he wrongfully took out a £45,000 Bounce Back Loan on behalf of his charity in October 2020. He then secured a further £5,000 top-up for the charity in March 2021.
Baker, who received Prince’s Trust loan to start his first business, was director and chair of The Leanne Baker Trust, a charity set up to campaign for the support of people struggling with their mental health.
The charity was established in 2014 but went into liquidation in September 2021.
The charity was set up in the name of Baker’s sister Leanne who sadly took her own life in 2013 days before her wedding. The news of her death made headlines.
Although charities were eligible to apply for financial support during the pandemic through the Bounce Back Loan scheme, The Leanne Baker Trust had no overheads or employees.
Baker stated that the charity’s turnover was £200,000 in order to secure the Bounce Back Loan, yet its annual accounts showed a maximum turnover of £26,029 for the calendar year 2019. Under the rules of the scheme, the charity was therefore not eligible for the funding.
Having received the funding, Baker did not use the money to support the charity, but instead used over £25,000 to pay off personal legal fees, and a further £13,000 for personal use.
The Liquidator reported the Bounce Back Loan misuse to the Insolvency Service when the charity went into liquidation, and has subsequently recovered the full amount.
The Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Darren Baker after he accepted that he caused The Leanne Baker Trust to obtain a Bounce Back Loan to which it was not entitled. His ban is effective from 15 December 2022 and lasts for 7 years.
The disqualification undertaking prevents him from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Given the accused’s livelihood as an artist, which is usually a career under self-employment, options for work will be limited.
Rob Clarke, Chief Investigator at the Insolvency Service, said:
Bounce Back Loans were offered to businesses that had been negatively impacted by the pandemic, with the money purely to be utilised for the economic benefit of those companies; safeguarding jobs and sustaining entrepreneurial activity. That clearly was not the case in this instance where the funds have been claimed by a charitable enterprise, with negligible turnover, and no employees.
Despite the humanitarian purpose of the trust as established, Darren Baker took advantage of the support available during this difficult time for his own personal gain. His disqualification should serve as a warning to others that the Insolvency Service will take action whenever a director’s dishonesty threatens loss to the public purse, the consequence being a lengthy exclusion from trading with the benefit of limited liability.
Baker was official artist to the 2012 Olympic Games in London, a Fine Art Trade Guild Award Winner of Best Artist in 2010, and a winner of the Garrick Prize at Christies, London.