Investor duped into bad business deal
A businessman who claimed he had lucrative contracts with sports stadiums has been ordered to pay back a man who invested $70,000 into what he thought was a ‘‘prominent’’ company.
Chris De Villiers took businessman Manu Rastogi to court, alleging he was duped into investing in EVP Recruitment.
In 2009 he answered an advertisement looking for a sales manager and partner to help grow an already successful ‘‘prominent’’ south Auckland business run by Rastogi.
At the Auckland District Court, de Villiers claimed Rastogi told him the business had an $180,000 per annum turnover, that profits could be tripled, and that it had contracts lined up at super rugby and cricket games at Eden Park, Warriors games at Mount Smart, and Alexandra Park race meetings. Rastogi allegedly produced invoices totalling $235,000 which he said were from clients, including top end hotels at Eden Park, Alexandra Park, and Ellerslie Events Centre. He was also said to have provided an income and expenditure statement from the previous year showing profits of more than $100,000.
Satisfied the business venture was sound De Villiers took out a loan to purchase half the business, providing the supporting financial information Rastogi had given him.
In 2014 De Villiers began court proceedings, alleging the business never deposited income into its accounts, that the tax return filed in 2008 by Rastogi had showed a taxable income of just $7356, that Eden Park had invoiced the business just once and that Mount Smart and Alexandra Park never had, and that at least 10 invoices produced by Rastogi were fake.
De Villiers said he relied on Rastogi’s representations in making his decision to invest in the business and that he was only willing to do so on the basis of the financial information provided.
De Villiers sought a total of $69,168.38, he paid into the business, be returned.
Judge Nevin Dawson said there was ‘‘strong documentary evidence’’ supporting De Villiers’ allegations.
Rastogi had since moved to Australia and declined to participate in proceedings.
Judge Dawson ruled De Villiers had paid nearly $70,000 into the business based on ‘‘misrepresentations’’ and he was entitled to have the money refunded to him.
A businessman claimed he had business with Eden Park and Mount Smart, in order to get an investing partner on board.