I've always paid my loans, says Krukziener

Andrew Krukziener arrives at the High Court in Auckland yesterday. Photo / Greg Bowker

Auckland property developer Andrew Krukziener has always repaid loans he and his companies have borrowed from trusts and banks, he told a court today during a creditors' proposal hearing.

Krukziener is fighting an application by Inland Revenue to bankrupt him over some $6 million.

Inland Revenue already has a judgment against Krukziener for $575,000 after winning a case that classified loans he received from his trusts as income and therefore liable for tax.

Krukziener is appealing a Taxation Review Authority (TRA) and a High Court decision that deemed the loans he received, during 1991 and 2002, as income.

The majority of the loans have since been repaid.

About 70 per cent of Krukziener's creditors, that are collectively owed $47m, have accepted his proposal that will see them paid dramatically deflated returns on their investments.

This hearing is being held to determine whether the creditors' proposal should be accepted or whether IRD can move forward with its wishes to bankrupt him.

Krukziener lawyers have said that this proposal will be better for creditors than if Krukziener is bankrupted.

IRD lawyer Nick Malarao asked Krukziener why he was so concerned in paying back loans to banks and lenders but wasn't concerned in paying his tax to the commissioner.

Krukziener said he had always, until the TRA decision, paid his tax obligations.

Krukziener lawyer Bruce Stewart, QC, said yesterday his client was appealing the TRA and High Court decision over the disputed debt IRD is alleged to be owed.

Krukziener believes he can win.

Many businessmen, including former mayor John Banks, have come out in support of Krukziener and his contribution to the Auckland skyline and to the city's economic activity.

If Krukziener is bankrupted he will not be allowed to trade through a company or be a director.

He will have to seek a job as an employee and be allowed to earn up to $40,000 before the Official Assignee steps in.

The case continues at the High Court at Auckland.