Frustrated by Evan Stewart’s failure to provide detailed financial information about Eversons International, his insolvent legal-high business, liquidators from KPMG sued for $2.07 million allegedly personal drawings taken by Stewart from his company. Mr Stewart stalled in the High Court, forcing KPMG to dig deeper without his co-operation.
Eversons’ liquidators are trying to trace millions of dollars transferred to Australia by Mr Stewart in early May 2014. Two million dollars was withdrawn from Eversons’ bank account days before a government law change prohibiting sales of synthetic highs destroyed Eversons’ business model. Evidence before the High Court indicates Eversons incurred losses totalling five million dollars in lost raw materials destroyed under police supervision together with wasted processing and packaging costs. Eversons’ tax filing for the year ended March 2017 values its overseas investments at over $6.5 million. KPMG can find no evidence of these investments; it suspects Mr Stewart personally controls funds sent overseas. In New Zealand, Inland Revenue claims Eversons owes $3.7 million for unpaid taxes, including penalties.
Liquidator KPMG told the High Court Mr Stewart was not co-operative, failing as director of Eversons to provide information as requested. In particular, he failed to provide details of Eversons’ overseas investments or any relevant accounting records. Trawling through Eversons’ bank statements, KPMG tallied up payments made directly to Mr Stewart: $2.07 million. None of these payments were recorded as salary. Using the High Court fast-track summary judgment procedure, KPMG sued demanding repayment; the payments were on demand loans made by Eversons to Mr Stewart, it said. Associate judge Paulsen refused summary judgment. A forensic examination of Eversons’ financial affairs was needed. Mr Stewart claims two million dollars of the amount claimed was money he invested in Australia on behalf of Eversons. Mr Stewart was under no obligation to disclose in summary judgment proceedings where the money went. For summary judgment, KPMG needs to determine the correct position, said Judge Paulsen.
Eversons International Ltd v. Stewart – High Court (3.12.20)
21.007