Auckland butcher pleads guilty to breaching bankruptcy restrictions
Sushil Kumar Sharma pleaded guilty in November at the Auckland District Court to five charges under the Insolvency Act 2006, brought by the Official Assignee.
The charges were for managing a business while bankrupt without consent from the Official Assignee, fraudulently removing property, concealing property, making a false statement to creditors and misleading the Official Assignee.
“Mr Sharma offended in a serious and blatant way,” says Official Assignee Ross van der Schyff.
“He carried out a consistent course of highly dishonest conduct both before and after his bankruptcy adjudication, and caused financial harm to the public.”
Mr Sharma was adjudicated bankrupt in June 2015, after operating a butchery business in South Auckland, which incurred significant debts.
In the years prior to his bankruptcy, he transferred significant personal assets, including four cars, and large bank account deposits of around $141,000, to his family members and a family trust.
“This caused significant harm to the creditors in his bankruptcy, as it deprived them of assets that would otherwise have been used to satisfy Mr Sharma’s debts,” says Mr van der Schyff.
After being adjudicated bankrupt, Mr Sharma carried on his meat trading business through a company directed by his daughter, and obtained further credit from various other meat supply companies on behalf of that company.
He operated this business using one of the vehicles he had previously fraudulently transferred to a trust controlled by his wife.
This activity was in direct breach of the prohibition against a bankrupt person taking part in the management of any business without the consent of the Official Assignee (whether through a company, or otherwise).
He was also a signatory to this company’s bank account, and concealed approximately $113,000 in earnings from the Official Assignee.
“While Mr Sharma was busy lying about his employment, income, and what property he had transferred to his family trust, the earnings he concealed could have been used to meet what was owed to his creditors,” Mr van der Schyff says.
The offences to which Mr Sharma pleaded guilty carry maximum penalties of up to three years imprisonment. The sentencing date has yet to be set down, but is likely to be in the first half of 2018.
Mr Sharma will not be discharged from bankruptcy until 14 July 2018. He is still prohibited from taking part in the management of a business until that date.
As a result of his conviction under the Insolvency Act 2006 for managing a business while bankrupt (which operated through a company), he is prohibited from being a director or promoter of, or to take part in the management of, a company, unless he obtains the leave of the Court, for a period of five years, pursuant to s 382 of the Companies Act.
“Mr Sharma’s case should serve as a strong deterrent to any persons who are considering acting in breach of their bankruptcy restrictions,” says Mr van der Schyff.
Sushil Kumar Sharma is also known as Shushil Kumar Sharma, or Jim Sharma.