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Jason Dorday / Things
Receiver Damien Grant says Kiwi Transport Services staff will receive only a fraction of what they were entitled to.
A courier company that received more than $ 70,000 from the government’s wage subsidy plan allegedly used the money for business expenses instead of paying staff.
Kiwi Transport Services Limited went bankrupt on April 17 and Ignite Finance named Damien Grant at Waterstone Insolvency as the recipient. Kiwi Transport operated under contract with New Zealand Post.
Grant said Kiwi Transport Services director Nitin Nand spent most of the salary subsidy payment on bills and business expenses, while 10 employees had received nothing.
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Grant told staff in a letter that Kiwi Transport Services received $ 70,296 from the wage subsidy scheme on April 14.
After three days, just under $ 3000 remained.
As a result, staff would receive only “a fraction of what they were entitled to,” Grant said.
Then on April 17, $ 64,642 was transferred to the account from another account that had a $ 20,000 overdraft on ASB and a $ 44,642 payment from NZ Post.
Grant said Nand claimed that the $ 64,642 transferred from his second account to the original account was part of the wage subsidy.
SIMON MAUDE / Things An application for liquidation by Inland Revenue against Kiwi Transport Services was to be heard in Auckland High Court on April 30.
Since the money came from the NZ Post and not from the wage subsidy program, that money was owed to other creditors in the company and took precedence over staff wages, the letter said.
Grant said employees could only be paid with the $ 20,000 overdraft.
Grant had not paid the staff for four weeks before the court administration.
Inland Revenue filed an application to liquidate Kiwi Transport Services on February 27 and was due to be heard in Auckland High Court on April 30, according to documents seen by Things.
Kiwi Transport Services received a lawsuit to pay the tax arrears on January 23.
The firm owed the tax department $ 94,390, most of which went to PAYE and GST, according to the documents.
Nand denied Grant’s events of what happened.
Nand claimed that while his business had been “struggling” for about a year, after reducing its fleet and not replacing the leaving drivers, the company had a profit of at least $ 20,000.
Things
So far, more than 1,200 companies have paid at least $ 17.5 million in wage subsidies, MSD records show.
Nand claimed that when his business went bankrupt, $ 110,000 was available, of which $ 70,000 was the wage subsidy money.
“Hand in hand, I left the business with $ 110,000. Where has that money gone?”
Grant said this was not true. When he was named, the company had $ 67,000 in his account.
Nand said that after receiving the wage subsidy, he made a “significant financial payment” of $ 3,000, from his subsidy allowance, for his company’s van.
He planned to pay his staff the salary subsidy on April 20, but said it was too late since the recipient had taken control of the company.
“I have 10 people who have not been fed and cannot feed their families and this is very sad at a time like this when we have a pandemic.”
Nand said he received a two-week notice from Ignite Finance that he was naming recipients if he couldn’t repay a $ 50,000 loan.
Nand did not provide evidence to back up his claims, as the Ministry of Social Development (MSD) was investigating the matter.
Grant said he would report Nand to MSD for the violation.
