Meghan Markle's engagement dress designers used company funds for holidays, exotic lingerie until it went under

European Fashion label Ralph & Russo went into administration earlier this year, citing a financial downturn caused by the COVID-19 pandemic, but it has now emerged that owners and founders Tamara Ralph and Michael Russo also had a huge role in causing its collapse.

The luxury brand had designed the daring and unconventional couture gown that Meghan Markle wore for her official royal engagement photo with Prince Harry in 2017. The long sleeve floor-length dress that featured a beaded and embroidered see-through top (over a nude lining) and a frothy dark skirt retailed at £56,000. The brand also designed gowns for stars like Gwyneth Paltrow and Kylie Minogue.

However, the company became insolvent in March this year, owing £23 million to creditors and the taxman. The administration has now sued Tamara Ralph, 39, and Michael Russo, 44, for using the brand's funds to "personally enrich themselves." According to documents released by the High Court, Ralph is being sued for £20.8 million in damages, but she has denied any wrongdoing and is defending against the claim, reports Mail Online.

The documents claim that Ralph used the money to fund a lavish lifestyle including the expense of more than £1,500 on "weekly blow-drys" at the Larry King hair salon in South Kensington, London. She also spent more than £300 on luxury lingerie at a store in Paris and £130 on an eyelash treatment. All these payments were made from the company's official bank account.

It has been claimed that Ralph previously complained that her £225,000 salary was "extremely low" for someone in her place. When two of the label's bosses refused to pay a £15,000 bill for her stay at a five-star hotel, she claimed that they were discriminating against her because she was pregnant.

Paul Appleton, a company administrator, said about Ralph and her co-founder Russo in a witness statement, "The founder directors have personally enriched themselves beyond their contractual entitlements."

Meanwhile, Ralph has denied the allegations against her, claiming that she only put blow-dries on expenses for interviews, photoshoots, or meetings when no third party would pay. She noted that she has not been given enough details about the lingerie spending, while claiming she was not aware that the payment for her eyelash treatment was made through the company.

She also clarified that the other payments she made through the company's account were a "proper accounting mechanism" and always classified as a "loan." When the company collapsed, she owed £195,436 in director's loans, which she has since repaid.

Ralph claimed that the cash flow problems were "in the main" caused by Russo. She accused him of "siphoning funds out of the company" and subjecting her to a campaign of "abusive bullying, harassment, and sex discrimination." Russo, who continues to owe the company £2.6 million, has refuted Ralph's accusations as "misleading and false."