Carl Cushnie, founder of the collapsed FTSE 250 company Versailles, channelled more than Ј610,000 in payments from within the group into a private company called C Limited, according to his former finance director.
Fred Clough told a jury at Southwark crown court that C - a company allegedly used by Mr Cushnie for business not related to Versailles - "was used to receive funds from certain companies within the Versailles Group".
Mr Clough, the central prosecution witness in the trial of Mr Cushnie, has pleaded guilty to three counts relating to his role in fraudulent trading at Versailles. Mr Cushnie denies two counts of conspiracy to defraud.
Earlier in the trial, prosecution counsel told the jury Mr Cushnie and Mr Clough had "milked the company for years". Versailles Group collapsed in 2000 owing its banks more than Ј70m.
