Search goes on to locate ex-rich lister
A $57 million claim against New Zealand businessman Eric Watson from the liquidators of his failed Cullen Group has hit a road bump – they can’t find him to serve legal papers.
Previously liquidators’ reports said Cullen Investments, the main asset holding company within the group, was owed about $57m by Watson, who had reciprocal loan accounts with the company.
Reciprocal loan arrangements work by lending money or selling loans with an agreement to buy them back later, and are sometimes used to conceal loans or sales.
The liquidators’ sixth and most recent report), filed on Monday, said proceedings against Watson had been filed in the High Court but attempts to locate him had failed.
‘‘The liquidators entered without prejudice discussions with representatives of Mr Watson, which have not resulted in any outcome,’’ the report said.
In December 2019, Vivian Judith Fatupaito and Luke Norman, of KPMG, were appointed as liquidators.
Cullen Group had been involved in a long-running court dispute with Inland Revenue, but costs associated with that battle pushed it into liquidation.
Inland Revenue assessed Cullen Group as having avoided $59.5m of non-resident withholding tax.
In March 2019 Justice Matthew Palmer ruled Cullen Group was part of a ‘‘web of entities’’ associated with Watson and designed to reduce his tax bill.
The sixth report said liquidators understood the Cullen Group was part of a complex structure of entities that spanned New Zealand, the British Virgin Islands, the United Kingdom and the United States.
‘‘Since their appointment the liquidators have worked to identify, freeze and control the Cullen Group’s assets by placing many of its entities into liquidation,’’ it states.
Asset recovered included $30,388 from the Cullen Investments’ bank account and $9353 from the Batty Road Holdings Limited’s solicitor’s trust account. Liquidators also received a bond refund of $23,877 in respect of a historic property owned by IP Holdings No 2 Limited.
Liquidators also located and sold physical assets of Watson Bloodstock Limited, a company for which Cullen Investments was the biggest creditor, and BRHL including two horses and artwork, receiving $167,322 after costs of sales.
Last year the United States Securities and Exchange Commission (SEC) charged Watson with insider trading after passing non-public information about a drinks company to a friend before its share price skyrocketed.
In 2020 the former rich lister was found guilty of contempt of court after withholding information about his assets from philanthropist and former business partner Sir Owen Glenn, who was pursuing Watson for $57m.
Watson served four months in London’s Pentonville Prison as a result.