Building firm linked to crooked ex-cop collapses
A troubled home building company linked to a crooked ex-cop has gone bust, owing hundreds of thousands of dollars.
Garden City Homes was placed into liquidation at a hearing in the High Court at Christchurch yesterday morning.
The court heard the building company owed the applicant, Affordable Concrete and Paving, $27,600.
Lawyers for two supporting creditors, Gill Joinery and Window Innovation, told the court the companies were owed $126,500 and $56,300 respectively.
Garden City Homes was not represented at the hearing.
Associate Judge Dale Lester made an order placing the company into liquidation.
Grant Reynolds, from Reynolds and Associates, was appointed as the liquidator.
Garden City Homes’ sole director and shareholder is Mehak Kala, but her husband, Sanjeev, was intimately involved in running the business.
He quit the police after he conned a student into giving him $1000 to help reduce a dangerous driving punishment and was convicted of fraud in 2016. The former constable was a gambling addict and had been banned from Christchurch Casino.
Last year, a Stuff investigation revealed Garden City Homes owed an array of contractors and suppliers hundreds of thousands of dollars and various home builds were months behind schedule.
At the time, the company insisted it was not in financial trouble, had paid invoices as scheduled and any delays with projects were due to issues outside its control.
However, in January, Garden City Homes was placed into receivership after it defaulted on a $400,000 loan from Prime Finance Ltd. It owed a similar amount to another lender. At the time, Mehak Kala said the appointment of the receivers had “come as a shock”.
Kala said the company was making arrangements to pay secured lenders and would work with the receivers.
She said media articles about the company last year “caused unnecessary stress” and affected the business.
Affordable Concrete and Paving applied to have Garden City Homes placed into liquidation after it failed to pay for work completed more than a year ago.
According to the Companies Office, Garden City Homes was incorporated in July 2018.
The company’s financial woes appear to have begun in late 2022, when contractors and suppliers began having to chase it for payment and building materials weren’t available as required.
The Kalas went on holiday to Rarotonga about that time.
Debt collectors and lawyers were involved in efforts to recover money the company owed to businesses, Stuff reported last year.
The Kalas had talked of building a 1000m² home in Rolleston, but in September they said they had no current plans to build a large house. Due to his fraud conviction, Sanjeev Kala could not be a director or involved in the management of a company until December 2021.
Last year, the Ministry of Business, Innovation and Employment said it received a complaint in November 2021 alleging he may have been involved in the management of Garden City Homes. That complaint was not substantiated.