The sister of embattled merchant banker Sam Kelt is fighting him in court over a $313,000 inheritance she claims she was left by her father.

Susanne Foote claims to have inherited the loan which her father, Gordon, had made to the horse stud, Keltern Stud Ltd, that he ran with Mr Kelt.

In the High Court at Napier yesterday Mr Kelt's lawyer, Nick Russell, told Associate Judge David Gendall that the money had never been a loan, but had been a shareholding in the company.

Mrs Foote's lawyer, Jol Bates, disputed this and said Mrs Foote had applied to have the company liquidated as she believed it was insolvent.

Its sole asset, the horse stud, had been sold and all horses of any value had been sold. He said there was also a supporting creditor, Crown Asset Management Ltd, which claimed it was owed $1.4 million by Keltern Stud.

Mrs Foote became a director of the company in 2000 after Gordon died.

She ceased being a director in 2010, but a trust run by her, and her husband, remains half owner of the company.

Mrs Foote said there was unexplained mismanagement of the company by her brother and court action had been the last resort after mediation failed, Mr Bates said.

In July 2010, Mrs Foote sought repayment of the $313,213 loan her father had made to the stud. After Mr Kelt failed to respond to the demand she issued liquidation proceedings.

Mr Kelt filed his opposition to the application out of time, but yesterday Judge Gendall ruled that his defence could be heard.

Judge Gendall said Mr Kelt asserted that the company was not liable for the debt and he had filed an affidavit stating the company was solvent.

While Mrs Foote said company accounts before 2010 had recorded the amount as a shareholder's loan, draft accounts for 2011 and 2012 provided by Mr Kelt recorded it as equity. He adjourned the matter to a date yet to be arranged.

In a separate matter, Judge Gendall gave Mr Kelt's company, Kelt Capital, 24 hours to come up with a payment plan to Inland Revenue for $335,160 in unpaid tax and penalties.

The company had until 1pm today to come up with a suitable plan, he said.

If a plan was not forthcoming the company would be put in liquidation.

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