Case Background & Strategy

Main Content

When the company is profitable but you see no return, profits are usually being diverted somewhere. NZSK Legal — led by Khoo Ai Theng — finds where and pursues the appropriate remedy.

Common Profit Diversion Schemes NZSK Legal Investigates

• Excessive director remuneration
• Related-party service contracts at inflated rates
• Property leases to family members at above-market rents
• Loans to majority shareholders at below-market interest
• Asset transfers to majority-controlled entities at undervalue
• Management fees to holding companies
• Diversion of business opportunities to private entities

Frequently Asked Questions (FAQ Schema)

Q: Can the majority withhold dividends from minority?

A: Persistent withholding despite distributable profits constitutes oppression under section 346 CA 2016. NZSK Legal pursues directive orders requiring dividend declaration.

Q: How do I prove profit diversion?

A: Forensic accounting analysis of financial statements, related-party transactions, director remuneration, and asset transactions. NZSK Legal coordinates with forensic accountants.

Q: What if directors are paying themselves excessive salaries?

A: Where remuneration is excessive relative to market and unauthorised by shareholders, section 346 oppression claim and director duty breach claims apply.

Q: Can I get back diverted profits?

A: Disgorgement and account of profits remedies are available. NZSK Legal pursues recovery through derivative action or direct claims.

Q: How long do these cases take?

A: Contested matters 12-24 months. Forensic investigation adds time but strengthens the case. NZSK Legal pursues interim orders where assets are at risk.