Charles Innes: Podular and Sanders tiny home director ‘required’ to testify in $5.2m company collapse

A barrister in the Auckland High Court described Podular's finances as a "serious mess". Photo / Podular

Liquidators are seeking to haul a businessman into court to testify why a building company he was in charge of was found in a “serious” financial “mess”, having allegedly traded while insolvent for two years before collapsing owing $5.3 million to creditors.

Former Auckland resident Charles Innes was director of tiny home and shed building companies Podular Housing Systems and Sanders Manufacturing, which went into liquidation in November and April respectively.

Liquidators estimate more than 100 customers from the two companies paid for homes and sheds that were not delivered, leaving creditors claiming they are owed more than $6m.

The Herald also revealed yesterday that despite leaving New Zealand shortly before Podular went into liquidation last year, Innes is understood to have continued running a third company - trading as Fenceadeck - building sheds and decks in Auckland.

Gerry Rea Partners, which is liquidating Podular, said - in an affidavit cited during a High Court hearing on Thursday - its investigations had identified “serious issues” at Podular.

The liquidator has now applied for a court order “requiring” Innes to return to New Zealand “to attend the High Court at Auckland to be examined under oath and to produce all the company’s books and records within his possession and control”.

Podular and Sanders’ combined collapse is among the largest failures in the modular home and cabin sector.

The companies advertised they could make homes, cabins and sheds using modular designs that could supposedly be mass-produced, while also being modifiable to suit the needs of individual customers.

But Podular’s failure left customers, such as young Wairarapa dad Eli Thomas, struggling to pay a $350,000 mortgage for a tiny home he never received and Wellington couple David Pirotta and Kathryn Percival paying more than $500,000 for a home they also have not received.

Court documents submitted during a High Court at Auckland hearing on Thursday publicly revealed new details about the scale of Podular’s collapse.

Barrister Bret Gustafson from FortyEight Shortland Barristers, representing liquidators Gerry Rea Partners, described the finances at Podular as a “serious mess”.

His court submission alleged it became apparent to liquidators that Podular “had been insolvent for over two years but during that time the company had continued to contract with purchasers to build bespoke modular houses at the company’s two factory sites in Hamilton and Christchurch”.

Sophie Annen and Eli Thomas, pictured with daughter Charlie-Rose, didn't receive a house after paying $350,000 to Podular. Photo / Dave Lintott

Ben Francis from Gerry Rea Partners said - in an affidavit cited during the proceedings - he had identified what he believed were “serious issues” at Podular.

Among those were creditors claiming they were owed more than $5m, including customers paying more than $2m in deposits for homes that were never started and for which the money appeared to have been spent for other purposes, Francis said.

He also said company records were missing and had “possibly been removed”, that “vehicles belonging to the company cannot be located” and that he had “concerns in relation to the conduct and management of the company”.

Garry Whimp from liquidators Blacklock Rose, which is looking into the finances of Sanders Manufacturing, told the Herald last month that the company he was examining had also continued taking money from customers despite being in financial strife.

Whimp said what concerned him most was that there “were 48 deposits received by the company in the last three or four months” at a point in time when he believed it would have been “clear the company was insolvent”.

The Herald last year spoke with the lawyer of a Podular customer who said they paid a $56,000 home deposit to Innes about three weeks before Podular went into liquidation.

Another man earlier told the Herald they had been in the final stages of paying a deposit to Podular until they read this news outlet’s first story about the company in November 2022.

The man claimed Innes had been rushing him for the money.

“Charles wanted a deposit from me asap,” he said.

“Thank you for saving my bacon, without your story, I was going to [be] in a big hole.”