Conduct of company director being investigated, liquidator says
Saturday, 24 May 2025
The liquidator of a long-running Timaru kitchen company is investigating the conduct of its director, and whether the company continued to trade while insolvent.
The latest report on the liquidation of Kitchens Direct (NZ) Ltd also shows the company owes more than previously reported, with creditors now owed more than $459,000.
Kitchens Direct (NZ) Ltd, and three other linked companies, was put into liquidation in October 2023 by shareholder resolution.
The liquidations of the three other companies, Kitchens Direct Appliances Ltd, Kitchens Direct IP Holdings Ltd and Kitchen Direct Franchising Ltd, were completed in December and all three had been removed from the Companies Register.
The liquidation of Kitchens Direct (NZ) Ltd continues.
In his fourth report, for the period October 10 to April 10, which was filed on Monday, liquidator Mohammed Jan said the matter of $685,000 being taken from the shareholders account remained unresolved.
Director and shareholder Karl Te Raki was issued a formal demand over the account in May 2024.
On Wednesday, Jan said he was “in ongoing correspondence’’ with Te Raki over the matter, and hoped a resolution could be reached “prior to the commencement of any legal proceedings’’.
He was also reviewing transactions prior to liquidation “to determine whether they may be voidable under the Companies Act 1993’’.
Jan said as part of this assessment, he was examining the economic viability of pursuing recovery action and whether “clawing back these transactions would result in a net benefit to creditors’’.
“This includes considering the nature of the transactions, the parties involved, and the likelihood of recovery should proceedings be initiated,’’ he said.
Jan said the company’s financial records suggested the company “may have continued to incur debt at a time when it was unable to meet its obligations’’.
“As a result, the liquidator is investigating potential insolvent trading and the conduct of the director. Legal proceedings are under consideration, depending on the outcome of ongoing investigations and a cost-benefit assessment,’’ he said.
In November, Jan said Bartercard had confirmed a balance of $44,604 in the company’s account at the time of liquidation. He was in discussion with Bartercard for the credits to be transferred to him, he said at the time.
In his latest report, Jan said the Bartercard application process was near completion.
He said the shareholder had raised several questions regarding settlement of the current account and the potential consequences of legal proceedings.
Jan said he had advised the shareholder of “potential legal consequences if the outstanding shareholder current account remains unpaid’’.
“Constructive discussions are ongoing, and the liquidator remains committed to resolving the matter without immediate legal recourse,’’ Jan said.
As of November, when the third report was released, creditors of Kitchens Direct (NZ) Ltd were owed more than $350,000.
However, the latest report showed that total had increased to $459,690.
Jan put this down to the additional creditor claims since his third report.
“This reflects a natural progression as more creditors become aware of the liquidation and file their claims,’’ he said.
“These amounts represent verified creditor submissions; no penalties or fines have been added by the liquidator.’’
Preferential creditors included Inland Revenue, which had filed a claim of $78,065.67, and claims from eight staff members, totalling $24,194.93.
Claims from 27 unsecured creditors totalled $339,614.48, and there had been one claim from a secured creditor for $17,814.57.
Jan said it was not possible to provide an estimated completion date for the liquidation.