Judge rejects plan to avert bankruptcy

May Wang. Photo / Greg Bowker

Businesswoman May Wang has had her $1.35 million creditors' proposal dismissed because information she provided the court and creditors on her assets was "demonstrably and materially incorrect", a judgment revealed.

The case is expected to resume at the High Court at Auckland today to determine the next step in Inland Revenue's application to bankrupt her over a $1.3 million debt.

Associate Judge Hannah Sargisson said the information Wang had provided was "simply incorrect" and did not comply with the requirements needed to approve a creditors' proposal under the Insolvency Act.

Wang put forward the proposal to avert bankruptcy, which she claims will stigmatise her in the eyes of Asian investors, and because she says creditors would receive more from the $1.35 million pot than if her assets were liquidated.

But Sargisson said claims Wang is not, in her personal capacity, a shareholder of any relevant companies is "plainly false".

"She is in her personal capacity a shareholder of UBNZ Trustee. UBNZ Trustee is not a 'simple trustee vehicle'. It is a discretionary beneficiary of the UBNZ Trust. It is possessed with almost limitless powers under the trust deed.

Sargisson said it was a half-truth that Wang was not a beneficiary of UBNZ Trust because she was the sole shareholder of its trustee - UBNZ Trustee. "The information provided is not simply incorrect. It is so demonstrably and materially incorrect is does not comply with the requirements of the act."

Sargisson said Wang's failure to disclose her interests in several British Island Virgin companies to the proposal as a "material omission".

She said her creditors were "denied the opportunity" to gain greater insight into her assets, or lack of, in the BVI companies she is a director of.

The UBNZ group is fronting Natural Dairy's bid to buy 16 Crafar farms. UBNZ bought four Crafar farms earlier this year. Natural Dairy intends to buy all 20 farms from UBNZ.

Sargisson said the Natural Dairy transaction, left UBNZ Trustee with securities of very considerable value, likely to be comprised in large of convertible note in Natural Dairy once the farms have been bought from the group.

The trust's property also includes a dairy processing business in Tauranga and the beneficial interest in shares in Natural Dairy. The plant has secured a contract, worth about $100 million, to export UHT milk to China for the 2011 financial year.

Wang claims a bankruptcy will ensure she is shunned by Asian investors that are needed for the Crafar deal and other business transactions. Wang told the court that if she was bankrupted the Crafar deal would fall through.

Sargisson said the situation was unlikely to be as "stark" as Wang suggested.


THE PROPOSAL

*Wang offered her creditors $1.35m or 6.5c in the dollar on a $22m debt to avoid bankruptcy.

*UBNZ agreed to advance Wang $600,000 or three years salary at $200,000 per annum.

*Wang told the court $100,000 would be set aside for living costs.

*Another $850,000 has been put forward from mystery backers in Hong Kong.

*Inland Revenue wants her bankrupted over a $1.3 million debt.

*Westpac has a judgment against Wang for $620,342.