May Wang undermines insolvency regime, Judge says

Wang’s efforts to dodge bankruptcy undermine insolvency regime: Judge

By Paul McBeth

Dec. 7 (BusinessDesk) – Auckland businesswoman May Wang undermined the “integrity and efficacy of the insolvency regime” as she unsuccessfully tried to stave off a bankruptcy bid, according to a High Court judgement.

Associate Judge Hannah Sargisson yesterday refused an appeal in the High Court in Auckland from Wang to quash bankruptcy proceedings brought by the Inland Revenue Department over a $1.3 million debt linked to the collapse of her property development company Dynasty Group. Wang is fronting a bid from Hong Kong-listed Natural Dairy (NZ) Holdings to buy the Crafar family farms.

Sargisson said Wang’s lack of disclosure around her interests in the UBNZ group of companies was “so serious that on this ground along the court should refuse to approve the proposal.”
The judge decided claims Wang wasn’t a beneficiary of UBNZ Trust and that she wouldn’t personally benefit from the Natural Dairy transaction were “flagrant distortions of the trust.” Wang’s proposal to repay creditors 6.5 cents in the dollar was not one they should agree to, and wasn’t commercially viable, she said.

“The integrity and efficacy of the insolvency regime generally, and of the proposal regime in particular, is wholly undermined when an insolvent approaches his or her creditors and the court in an evasive or otherwise disingenuous manner,” Sargisson said in her judgement. “I consider this to be the case in respect of Ms Wang’s disclosure of her interest in the UBNZ Trust. She has shown a singular lack of candour that I have found it impossible to overlook.”

The judgement said Wang’s “attitude to her creditors is one suggestive of an ongoing risk,” and her “imprudence or commercial irresponsibility evinces or points to the possibility of a continuing threat of harm to the commercial community.”

There is “considerable worth” in an Official Assignee investigation into Wang’s affairs and whether post-bankruptcy restrictions might be appropriate, Sargisson said.

The bankruptcy proceedings will return to court tomorrow.

(BusinessDesk)

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