Signia Wealth has accused co-founder Nathalie Dauriac of reporting more than £33,000 in personal expenditures as business costs before she parted company with the business in early 2015.
Dauriac (pictured) denied the allegation, which was laid out on the first day of a civil trial between her and her former employer.
She has counter-claimed that she was forced out of the business - which she founded with John Cauldwell, the entrepreneur best known for Phones 4U – in 2009, after having £10 million of equity in the business expropriated.
Lawyers acting for Signia told the judge that Dauriac had altered references to personal costs, including a trip to Málaga to celebrate a friend’s birthday, gifts for her daughter and former husband and photographs at a ski resort where she had been on holiday with Caudwell, in order to bill them to the company.
That had allowed her to afford a 'lavish lifestyle', said Monica Carss-Frisk QC for Signia, alleging that Dauriac had felt she was underpaid and had unfairly been denied a bonus.
Thomas Plewman QC for Dauriac claimed that had used 'as a means of punishment for her raising an allegation that Caudwell used false invoices to avoid VAT,' and that he would offer evidence that Cauldwell 'likes to set bonuses high and then find a way to fire employees'.
He added that much of the cash had been spent on legitimate business expenses incurred flying around the world to meet Cauldwell for business meetings. 'This is not a hardware store, it’s a relationship business,' he added saying that a 'bright line between business and personal' was 'simply not there'.
He described Cauldwell as a 'puppet master' who had staged the enquiry to force Dauriac out while offering her only a nominal fee for her 49% stake in the enterprise.
Cauldwell had presented her with a 'draft written confession' and demanded she seek psychiatric help and invest a further £2.5 million into the business if she wanted it to continue as a going concern.
The trial continues.