Secretary of State for Business and Trade v Pal [2026] EWHC 262 (Ch) (12 February 2026)

Secretary of State for Business and Trade v Pal [2026] EWHC 262 (Ch) (12 February 2026)

The defendant knowingly or recklessly overstated the company's turnover in the Bounce Back Loan application, causing the company to receive a loan to which it was not entitled, and used the funds for purposes not providing economic benefit to the company. This conduct amounted to serious misconduct, breached the standards of commercial morality, and rendered the defendant unfit to be concerned in the management of a company. A disqualification order is mandatory.

Citation
[2026] EWHC 262 (Ch)
Parties
Claimant: The Secretary of State for Business and Trade; Defendant: Sehar Pal
Jurisdiction
England and Wales
Judgment Date
12 February 2026
Procedural Posture
Disqualification and Compensation Claim Under Company Directors Disqualification Act 1986 / Final Judgment After Trial
Outcome
Disqualification order made against the defendant for unfitness as a director; compensation order to be determined.
Legal Topics
Director Disqualification, Bounce Back Loan Scheme, Misfeasance, Fraudulent Misstatement, Compensation Orders
Company Law Insolvency Law Director Disqualification Bounce Back Loan Scheme Misfeasance Fraudulent Misstatement Compensation Orders

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Parties

The Secretary of State for Business and Trade

Claimant

Sehar Pal

Defendant

Procedural Posture

Disqualification and Compensation Claim Under Company Directors Disqualification Act 1986 / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendant's conduct as director made her unfit to be concerned in the management of a company under s.6 CDDA 1986
  2. 2 Whether the defendant knowingly or recklessly overstated company turnover in a Bounce Back Loan application
  3. 3 Whether the Bounce Back Loan funds were used for the economic benefit of the company

Ratio Decidendi

The defendant knowingly or recklessly overstated the company's turnover in the Bounce Back Loan application, causing the company to receive a loan to which it was not entitled, and used the funds for purposes not providing economic benefit to the company. This conduct amounted to serious misconduct, breached the standards of commercial morality, and rendered the defendant unfit to be concerned in the management of a company. A disqualification order is mandatory.

Court Disposition

Disqualification order made against the defendant for unfitness as a director; compensation order to be determined.

Orders

  • The defendant is disqualified from acting as a director or being concerned in the management of a company for a period to be determined (minimum 2 years, maximum 15 years, with submissions on period to follow).
  • Compensation order to be determined following further submissions on quantum.