A LABOUR MP has been suspended following questions over whether he tried to avoid repaying a loan given during the Covid-19 pandemic.
The Times reports that Bayo Alaba, MP for Southend East and Rochford, refused to answer questions about his alleged attempt to wind up one of his businesses before settling a loan that appears to have been given during the coronavirus pandemic.
Mike Wood, the Conservatives’ shadow Cabinet Office minister, called on Alaba to explain what happened with the company.
“These are concerning revelations and Alaba clearly has questions to answer,” Wood told The Times.
“Alaba needs to come clean about whether he tried to avoid paying his debts, and ministers should tell us if they had to intervene to stop it. The public deserve the truth.”
After being approached for comment by the newspaper, Labour suspended the whip from Alaba and an internal investigation was launched.
“Bayo Alaba MP has referred himself to the Labour Party so that these matters can be investigated in line with the party’s rules,” a spokesperson said.
“The Labour Party expects the highest standards from our elected representatives and we have robust processes in place to ensure those high standards are upheld. We cannot comment further while the investigation is ongoing.”
Alaba was elected in 2024 and previously co-ran a series of businesses in the nightlife and music sector, some of which fell into liquidation.
He remains co-owner of Alaba Properties Ltd, which appears to have taken out a bounceback loan during the pandemic.
Alaba previously confirmed he had taken out two bounceback loans but would not clarify which companies did so, or answer any specific questions on Alaba Properties Ltd’s eligibility, the newspaper reports.
It is understood he is now repaying the loans.
The Times suggests that, according to a loans expert, the accounts filed by Alaba Properties Ltd are consistent with a company that had taken out a loan.
Records on Companies House show that there was an attempt to wind up the company in March 2022, but this is only permitted if a company has no outstanding debts.
If a company attempts to close down without paying its creditors, they can oppose the winding up and force the company through an insolvency process.
The Department for Business introduced a “dissolution objections process” during the pandemic to reduce losses from the misuse of bounceback loans.
In December last year, the Covid counterfraud commissioner’s report said that “around 70,000 businesses with outstanding Covid-19 loans placed in the dissolution objections process, many of whom would have committed fraud, possibly worth £0.9 billion, have since either repaid their loans or withdrawn their applications to dissolve”.
An attempt to wind up Alaba's firm was blocked on March 16, 2022, after the intervention of an unnamed third party.
This was because “cause has been shown why the above company should not be struck off the register”.
According to The Times a second attempt to do so was blocked on the same grounds on August 17, 2022.
