Failed forex boss Kendall Twigden has been labelled "a menace to the public" and banned from directing or managing a company for eight and a half years.
In a recently released decision, Deputy Registrar of Companies Peter Barker outlined dozens of complaints about Twigden in relation to three firms of which she was either a sole or co-director - Acorn Publishing Limited, Restaurant Limited and Phoenix Forex.
The decision was sought by the Ministry of Business, Innovation and Employment (MBIE), which presented evidence that Phoenix Forex continued trading while it was insolvent and that it owed creditors an estimated $2.1 million by the time it was placed into liquidation,
The Inland Revenue Department (IRD) also claimed that it was owed $1.4m from the company in PAYE, GST and student loan employee deduction arrears.
"I consider Ms Twigden has thumbed her nose at the IRD and has effectively disregarded the IRD as a creditor. Her mismanagement was either wilful or fundamentally ignorant of what is required of a company director," Barker said in the decision.
He accepted MBIE's evidence that Twigden had failed to keep proper accounting records in relation to Phoenix Forex and Acorn Publishing which, rather than being some sort of technical breach, he considered "serious and fundamental".
MBIE said liquidators, after analysing Phoenix Forex's bank accounts had found transactions including about $221,000 on restaurant expenditure, about $311,000 on personal retail spending, about $209,000 for payments of personal rent, and cash withdrawals of some $526,000.
"I consider the amount of money siphoned out of the company for the personal use of Ms Twigden to be appalling," Barker said. "I consider Ms Twigden has no concept of a company having a separate legal identity to the director and she cannot see that the personal self interest of Ms Twigden is different from the duties she owes to the companies and their creditors."
He added: "I consider that a director taking money from insolvent companies for her personal use is committing a theft on the creditors of those companies, particularly when those companies are insolvent."
Barker said it was apparent that Twigden had left New Zealand and had not updated her physical address with the Companies Register, as a company director is obliged to do.
MBIE had obtained two email addresses for her and sent her all necessary documents yet received no response.
Barker was satisfied that she had been given sufficient notice, nonetheless, he acknowledged that prohibiting her as a director could have an adverse effect on business activities she was conducting overseas and potential adverse effect on any of her dependents.
Twigden was adjudicated bankrupt in February last year.
He made an order prohibiting her from being a director or promoter of a company, or taking part in - directly or indirectly - the management of a company for 8-1/2 years. The maximum allowable prohibition period is 10 years.
"I consider Ms Twigden then and now has no concept at all as to the duties and responsibilities required of a company director. This is not a failing on a technical level. This goes to a more basic failing of a person who cannot, or will not, focus on the interests of the companies and its creditors," Barker said.
"I consider Ms Twigden is a menace to the public and the public requires protection from Ms Twigden."
Barker noted that any order of prohibition may not have any restriction on business activities conducted overseas.
In relation to Restaurant Limited, Barker determined that Kendall did not have to answer to the allegations as it was questionable whether the company's position had deteriorated much in the seven months she was director.
In 2013 the Financial Markets Authority issued a formal order against Phoenix Forex warning investors against dealing with the company.