Former deputy Auburn mayor Salim Mehajer held a 5.30am meeting with himself to remove the director of two of his companies who appointed administrators 12 hours later, a Sydney court has been told.
Mr Mehajer claims the administrators were not validly appointed on June 16 as Kenneth Lee was no longer a director and had been replaced by his sister Khadijeh Mehajer.
Creditors are seeking more than $97 million from the companies, Sydney Project Group Pty Ltd and S.E.T. Services Pty Ltd, which only had about $32,000 in the bank, the administrators' lawyer Andre Zahra said on Tuesday.
He unsuccessfully argued against the granting of an injunction, which has resulted in the cancellation of Wednesday's meeting of creditors pending a NSW Supreme Court hearing on Thursday about whether the administrators were validly appointed.
Marcus Young SC, for the companies, referred to the affidavit of Mr Mehajer who said, as the sole shareholder, he had the meeting with himself 12 hours before Mr Lee appointed the administrators.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Justice Paul Brereton asked: "At 5.30 in the morning?".
"It was Ramadan and people have to get up pretty early if they want to eat breakfast," replied Mr Young.
At the time Mr Lee appointed the administrators, Ms Mehajer was the director "so the appointment can't stand", he added.
But Mr Zahra said the administrators relied on checks made with the Australian Securities and Investments Commission register before their appointment and immediately after it was made.
The administrators had not been notified of Ms Mehajer replacing Mr Lee who apparently was not told until five days after he appointed the administrators on June 16, he said.
He added that receivers have already been appointed and had indicated they supported the appointment of the administrators.
There was no evidence Ms Mehajer had any experience in managing companies and she was potentially exposing herself to liability for insolvent trading, he said.
"If that is a risk she wants to take, that is a matter for her," the judge said.
