Using their RNM Enterprises Ltd company bank account as a personal piggy bank saw Monish Prasad and mother Asha ordered to pay $631,500 after the company went into liquidation insolvent.
Using company cash to meet personal expenses left them with a debt owed the company, recorded in company accounting records as a shareholder current account.
Auckland transport company RNM Enterprises Ltd was forced into liquidation by unpaid creditors in June 2023.
Loss of a major client, difficulty in getting drivers and increasing costs were blamed for the insolvency.
Investigations by RNM Enterprises’ liquidator identified substantial sums of cash borrowed from the company by the two shareholders over a two year period ending March 2023. This included payments for gym membership, hotel accommodation, movie tickets, monthly Sky subscriptions and credit card payments plus large cash drawings.
These withdrawals amount to borrowings from the company, repayable on demand, Justice Anderson ruled.
Mother and son were ordered to repay $631,591.
They did not appear in court to defend the liquidator’s claim.
RNM Enterprises Ltd v. Prasad – High Court (17.03.26)
26.104