Business, Crime

Rose Built Homes used as ‘cash cow’

Appointed liquidator Brenton Hunt revealed creditors were unlikely to see any money back from defunct building company Rose Built Homes. Photo: Matt Brown.

The bungling former owners of a defunct building firm may face criminal charges for fraud.

Rose Built Homes, which folded in September, has left Marlborough businesses out of pocket to the tune of $1.6 million.

Appointed liquidator Brenton Hunt revealed creditors were unlikely to see any money back, branding the case “one of the worst” he has seen in 25-years.

Treating the company as a “personal cash cow” could see former directors Ryan Butler and Kyle Payne in court, he says.

And the former directors have turned on each other, with Kyle blaming some of their dodgy dealings on his colleagues “gambling problems”.

The revelation comes amid rumours that Kyle has fled the country.

Brenton says he can’t stop Kyle from leaving the country.

“I can’t stop him travelling until I actually have judgement against him, and even then, a border alert would require details of his actual flight,” he says.

“Regardless…he can still be bankrupted here in New Zealand.”

Local contractors and businesses have been left high and dry, with one secured creditor owed more than $500,000.

Investigations uncovered a raft of costly personal purchases bought using company funds.

Boats, motorcycles and cars bought on finance were being paid from company accounts but registered to the young company directors.

But Brenton says he doubts any money will be paid out to any class of creditor.

“There were very few assets to be collected. Some office equipment and limited tools were collected from the office.

“The majority of these were returned to Christchurch and sold by Mainland Auctions, limited amount were sold to interested parties in Blenheim.”

“A number of creditors have raised jet skis as another asset, but I have never managed to locate any,” he says.

In addition, Kyle Payne traded a company asset, a Ford Mustang, on an Audi he recorded as his personally.

“The Audi still has a significant amount of finance over and above the trade-in value.”

Tax payments are “well behind” with no annual accounts ever produced.

Brenton says Kyle tried to blame the lack of tax payments on the company’s accountant, however, it is the director’s responsibility to file returns.

PAYE had not been paid since December 2018.

Kyle, in an interview with the liquidator, says he was not aware that non-payment of PAYE was a criminal offence.

“A huge amount of personal expenditure was coded in the company records as business expenditure and GST attempted to be claimed,” Brenton says.

“I have been working in insolvency for ten years, and as an accountant for over twenty-five years.

“Rarely have I seen company records in such a bad state.

“It has been very hard to work out anything form the records kept so I have had to go back to bank transactions.

GST had not been filed since March 2019 or paid since May 2018.

Brenton says Kyle had appeared to have committed “several items” of fraud and a creditor has offered to assist in filing a criminal complaint to police for fraud.

“Insurance records have been altered to allow customers to make drawdowns, customers have been asked to pay into bank accounts which are not company bank accounts and various customers and creditors have been lied to repeatedly,” he says.

“After recoding a lot of the expenditure which Kyle Payne had recorded as business expenditure but was paid to his own bank accounts, I have made a demand for $335,739.

“I have had no response to this demand so are now commencing judgement against him for this debt.”

Kyle sold his house, on Howick Rd, in September.

Brenton says Ryan was cooperative during the liquidation.

“He is apologetic for where everything has ended up and claims he never knew just how bad everything was.

“Regardless of his regrets he was a director and personally guaranteed several of the debts.”

Brenton says Ryan is looking into bankruptcy.

“As there has been very limited recovery from the company, I am funding a lot of the continued work for the liquidation myself.

He says the only asset of the company is the money which the directors had withdrawn in various ways.

“The likelihood of recovery of this for creditors is fairly remote so it is not anticipated any distribution for any class of creditor will happen.

“Regardless of this I will continue with my action against the director and see what comes out of it.”

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