Legal high importer with $3.7m tax bill to face court examination

Sunday, 20 March 2022

Evan Stewart, pictured in 2008 when his company was selling nutritional products to China.

A former importer and seller of legal highs with a $3.7 million tax debt has failed to stop liquidators putting him in court to answer questions about his cloudy finances.

The liquidators of Evan Stewart’s company Eversons International are trying to recover about $3m from the company, so they can meet its unpaid $3.7m tax debt.

Eversons went into liquidation in 2015 and although it appeared to have no money, its accounts showed it had overseas assets worth $6.5m.

Liquidators, Vivian Fatupaito and Elizabeth Keene, went to the High Court in June 2021 seeking an order to compel Stewart to submit to an examination in court and to produce company records.

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Evan Stewart is due to be examined in the High Court as liquidators of Stewart’s company Eversons International are trying to recover about $3 million. (File photo)

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Associate Judge Paulsen granted the order and said examining Stewart in court was both the logical and responsible step the liquidators should take to recover any assets or funds.

“Given his uncooperative attitude, I consider that such examination should be before the court,” the judge said.

Stewart appealed, but the Court of Appeal has upheld Judge Paulsen’s ruling saying Stewart’s stance on several matters was not plausible.

Eversons was a profitable company importing and selling synthetic legal high products until they were banned on May 7, 2014, at which time it stopped trading.

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An income tax audit in 2015 assessed arrears at $3.7m and Stewart put the company into liquidation. Its first liquidator Andrew Oorschot discovered 19 payments amounting to $3.1m from Eversons’ bank account to another company.

Stewart maintained the payments were made to his father in Australia.

After Oorschot resigned, the new liquidators continued chasing the $3.1m and also sought recovery of Stewart’s shareholder current account (the balance of funds introduced and withdrawn by the shareholder) debit of about $2m.

Stewart claimed he had transferred the $2m to his solicitor in Australia for investing on behalf of Eversons in units built with his father in Arundel, Australia.

But he failed to disclose in whose name the units were registered, how much was invested, the street address of the units or when they were sold. He said he had never visited the units, which were sold at a loss.

The date for the examination in the High Court has yet to be set.

Stewart and his father were jailed in 1999 for importing Chinese bee pollen by declaring it was cornflour.

Christchurch District Court Judge Christopher Somerville was told the pair believed the Ministry of Agriculture and Fisheries had deliberately obstructed their company, Megavitamins Ltd, to the point of bringing the $4m-a-year business close to collapse.

The judge said by putting their own interests first, the pair could have destroyed New Zealand's position of being one of the few countries in the world not to be afflicted with European foulbrood disease.