William and Valerie Kelly are majority shareholders in their family company, Kelly Construction. Their two sons sued in the High Court to find out where the money is going.
The Kelly boys are minority shareholders in Kelly Construction (2002) Ltd. Living in Alexandra, central Otago, they are the only shareholders ‘on the tools’ doing the physical work. Mum and Dad live in Dunedin, having shifted from Alexandra in the last three years. The High Court was told their parents are refusing to divulge important financial information. A copy of 2017 Kelly company accounts was made available only after a lawyer’s letter. The two sons were perplexed to find the accounts indicate payment to them of shareholder salaries, payments they say they never received. There are unexplained cash withdrawals amounting to nearly $85,000, they say. There are also questions about a Royal Terrace property in Alexandra which they thought was owned by the company. Their parents say it is owned by a family trust. It is currently listed for sale.
Associate judge Lester ordered disclosure of all Kelly Construction bank records for the last eight years together with details of any company payments for Royal Terrace in respect of mortgage repayments, rates, insurance and property maintenance.
Directors and management are accountable to shareholders, Judge Lester said. The two sons as shareholders are entitled to the information.
Kelly v. Kelly Construction (2002) Ltd – High Court (10.03.20)
20.054