Sanjit Singh has been ordered to repay
$262,300 taken from his Wellington-based company Taj Construction Ltd.
Taj
Construction was put into liquidation by Inland Revenue in May 2015 for unpaid
taxes. Investigations by Deloitte
liquidators Colin Owens and David Vance identified that Mr Singh had used his
building company as a private piggy bank.
Just over $432,200 had been taken from the company for personal expenses
over a five year period. Most was taken
in cash: $356,700. In addition the
company paid Mr Singh’s personal expenses for the likes of alcohol, eating out,
entertainment and household expenses including payment of a mortgage on his
home. When questioned by the
liquidators, Mr Singh said he had taken money from his company sometimes “as and when needed”. Liquidators netted the identified personal
drawings against the cash Mr Singh put into the company, leaving a net debt of
$262,300 due to Taj Construction.
Justice
Brown ordered repayment. It is a
well-settled principle that advances made by a company on shareholder’s current
account are a debt owed to the company repayable on demand, he said. He also ordered that Taj Construction was
entitled to $20,828 of the equity in Mr Singh’s home in Belmont, Lower Hutt,
representing company funds used to pay his mortgage.
Mr
Singh did not defend the liquidators claim.
Taj Construction Ltd v. Singh – High
Court (7.04.16)
16.054