A B.C. trucking firm related to a forestry company that’s under Companies’ Creditors Arrangement Act creditor protection is at the center of a dispute with lenders.

San Industries sought creditor protection on Nov. 29, 2024; it and its subsidiaries owing more than $150 million to RBC and Business Development Bank of Canada. RBC successfully convinced the courts to add Kingsley Trucking to the proceedings, as well as Cojax Heavy-Duty Repair, and cite peculiar payments to the related companies leading up to San’s CCAA filings.

Deloitte Restructuring has been appointed monitor and acknowledges mysterious payments made in the weeks leading up to the CCAA filing.

San Group is owned by Kamal Sanghera (also known as Kamaljit Singh Sanghera), Suki Sanghera (also known as Sukhjit Singh Sanghera) and Iqbal Deol. Suki and Kamal Sanghera are listed as directors of Kingsley Transport and Cojax Heavy Duty Repair.

The trucking company played a key role for San Group, providing most – if not all – transport of the forestry company’s products on Vancouver Island, court documents indicate.

“San Group’s products were picked up by Kingsley from the Coulson Mills or the SFP Plant and either delivered directly to customers or shipped to other San Group locations for further processing or shipping to customers; Kingsley also transported chips from the Coulson Mills and was used to move various equipment for San Group,” court documents say. 

“Cojax operates from a separate shop on the Kingsley premises and provides various repair and maintenance services on Kingsley’s trucks and trailers and for other customers;  The Kingsley premises are owned by Coombs [another San Group entity] and are subject to a mortgage held by RBC; and Kingsley stores its trucks and trailers at the Kingsley premises but also utilizes San Group locations to occasionally park its trucks and trailers, including at the SFP Plant and the Acorn Mill.”

In response to concerns raised by RBC, the monitor is looking into related party transactions, “which include significant payments made to Kingsley in the months leading up to the CCAA proceedings. Based on the information the monitor has been able to obtain to date, the monitor is concerned that notable and unusual payments were made by San Group to Kingsley shortly prior to the commencement of the CCAA proceedings.”

In October and November 2024, San Group reduced its amounts payable to Kingsley by nearly $1 million.

“The monitor has not received a clear answer on why these payments were made leading up to the CCAA proceedings,” Deloitte reports. “The monitor also understands that two payments totalling approximately $300,000 were made to Kingsley from San Group in October 2024, which do not appear to relate to or be applied against specific accounts payable invoices or recorded in the San Group accounts payable subledger for Kingsley.”

RBC says it’s owed $6.7 million by Kingsley Group and wants the trucking company liquidated. It claims Kingsley Group has a book value of about $7.3 million, however the bank notes it expects the book value is “far higher than its realizable value.”

“The bank has grave concerns regarding the preservation of the Kingsley Group’s property, specifically its accounts receivables, equipment and vehicles,” RBC said in a court filing.