Kapila Arachchilage filed for bankruptcy just prior to a court hearing holding him liable to pay $1.03 million wrongly taken from his cleaning companies Kiwicare Services Ltd and Care Budget Services Ltd.
While initially fending off the companies’ liquidator by saying the money was taken by someone else, he admitted to Insolvency Service on bankruptcy that he owed the money.
The High Court was told Mr Arachchilage walked away from his two companies back in 2020 when he voted as sole shareholder to put them into liquidation, telling the liquidator he had no involvement in company management despite being listed at the Companies Office as sole director.
The liquidator could find no evidence of annual accounts being finalised for either company. A forensic examination of company accounting records found company funds in excess of $600,000 had been withdrawn in cash over time from ATM terminals. Other records showed company funds had been spent at supermarkets, fast food restaurants, paying insurance unrelated to the business, and to purchase fuel.
In addition, substantial sums were simply transferred from company bank accounts across into Mr Archchilage’s personal bank account.
When questioned by the liquidator, Mr Arachchilage flatly denied responsibility saying he had been director in name only; a Mr Sagara ran the company, he said.
He refused to repay any money.
The liquidator had evidence that ATM withdrawals were made with cards issued in Mr Arachchilage’s name. The High Court was later told Mr Arachchilage did not progress stated plans to get bank video footage identifying who had used the card.
With the liquidator’s court hearing date looming, Mr Archchilage filed for bankruptcy.
In court, he did not defend the liquidator’s claim.
Justice Anderson ordered Mr Archchilage repay Kiwicare Services $749,000 and repay Care Budget Services $280,000.
Directors and shareholders drawing down on company cash are borrowing from their company, she ruled. These are an unsecured loans, repayable on demand.
To the extent Mr Arachchilage claims money was drawn down by or for the benefit of Mr Sagara, Mr Arachchilage is still responsible as named director to make good the company cash taken, Justice Anderson ruled.
Kiwicare Services Ltd & Care Budget Services Ltd v. Arachchilage – High Court (30.09.25)
25.210