D-Day for Hawkes Bay banker Sam Kelt

By Corey Charlton, Doug Laing -
Hawkes Bay merchant banker Sam Kelt. Photo / Duncan Brown
Hawkes Bay merchant banker Sam Kelt. Photo / Duncan Brown

Controversial Hawkes Bay businessman Sam Kelt, or more precisely his lawyers, were back in court yesterday - twice - as the Inland Revenue Department and family members kept up the pressure on him.

In the morning the beleaguered Hawkes Bay merchant banker's company, Kelt Capital, was given one more day to reach a debt-repayment agreement with the Inland Revenue Department before the company was put into liquidation.

According to a statement of claim filed with the High Court at Napier in September, the company owed $254,277.15, comprising $240,960.53 in unpaid GST, penalties and interest; $13,016.62 in fringe benefit tax and interest; and a $300 income tax penalty.

The High Court at Napier yesterday heard that amount had now increased to $335,160.65.

Kelt Capital's lawyer Nick Russell asked for a short adjournment, which was opposed by the IRD. The company was given until 1pm today to reach an agreement on how to begin repaying the debt.

Associate Judge David Gendall acknowledged that recently there had been a "flurry of activity on the part of the parties by way of an offer and counter offer", and he was prepared to give the company "one last chance" to resolve the issue before liquidation.

After lunch Kelt was given an opportunity to defend an application to liquidate company Keltern Stud brought on by family members after a "major and fundamental" breakdown in their relationship.

At the High Court, Keltern Stud's lawyer Nick Russell was given permission to file a statement of defence out of time in response to the application for liquidation, brought on in August by Kelt's sister Susanne Foote and her husband Stuart, as trustees of the Foote Family Trust.

The Footes and Kelt are equal shareholders in Keltern Stud.

In his judgment yesterday, Associate Judge Gendall said he was unable to find definitively "that the company is indeed presently insolvent so that it is urgent for an order to be made to place it into liquidation".

The liquidation application stemmed from "serious unanswered questions" regarding mismanagement and an alleged debt, the court heard.

Associate Judge Gendall said there was a "major and fundamental breakdown" in the relationship between main shareholders and to make a judgment on whether the company was insolvent required the court to have before it "all the proper and available" evidence. He said Mr Kelt had asserted the company was solvent and not liable for the alleged debts.

The plaintiffs were given 21 working days to file an additional affidavit of evidence, and the defendant would receive 10 more working days to file one in reply.

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