Wage subsidy: Firm claims $84k, director abruptly leaves NZ

To qualify, employers must make best efforts to top up the $585 payment to a minimum of 80...
According to the Ministry of Social Development, Capital A & M was paid $84,335 under the wage subsidy scheme. Photo: File
A Hokitika gold mine claimed $84,355 from the wage subsidy scheme before its director abruptly left the country and receivers were appointed at the start of lockdown.

According to the Ministry of Social Development, Capital A & M was paid $84,335 under the wage subsidy scheme to support a dozen employees.

But the company had receiver Thomas Rodewald appointed on March 26 after creditors became aware the company's director Jacobus Kotze had unexpectedly left New Zealand.

Kotze could not be contacted by the Weekend Herald, and reports filed to the companies office by Rodewald said he was currently overseas and "it is unclear if he will be returning to New Zealand".

A Weekend Herald investigation into the wage subsidy scheme canvassed nearly 88,000 companies paid a total of $12 billion and found 34 had claimed support but entered receivership or liquidation before the scheme's 12-week duration had expired.

Altogether these companies claimed $5.7 million to support 842 employees - but these business failures represent only 0.07 per cent of total wage subsidy payments and appear to be outliers.

Rodewald's first report to the companies office notes Capital A & M owed $2.1m, including $36,420 to staff.

Of the wage subsidy payments only $55,000 had been recovered and Rodewald said negotiations were under way with "relevant government authorities" over distribution of those funds. Kotze's shareholder current account was also overdrawn $74,416.

Rodewald told the Weekend Herald Kotze had reportedly been in the United States, but was now understood to be in Australia. He said the wage subsidy payment was "under investigation" and he had agreement with MSD to make some payments to staff.

Rodewald expressed some consternation at the MSD, saying he had been dealing with three different people from different departments. "I'm not a happy chappy from the point of view of wasted time," he said.

The Weekend Herald investigation into the wage subsidy scheme also revealed the New Zealand operations of Australian luxury stationery provider Kikki.K had also claimed the wage subsidy despite entering liquidation prior to lockdown.

Liquidator Andrew McKay said his appointment on March 23 saw him arrive in "quite an interesting scenario" where initial plans to continue trading were interrupted by the level 4 lockdown.

"We tried to preserve jobs, and negotiate with landlords, but by the time we walked in, staff had already shut the doors," he said.

McKay said he had received legal advice prior to applying for the wage subsidy, and ensure the funds were paid into a trust account and on to employees.

His report filed to the companies office states the failure of the business was partly caused by "a particularly low domestic December-January 2020 trading period".

In total, MSD said $185,244 was paid to cover 34 employees.

"Some of it is going to be returned, because some people abandoned their positions," McKay said.

Approached with questions this week, MSD said no one was available for an interview and they would not comment on individual cases.

A spokesperson for the department said 6336 audits had been completed of claimants under the scheme, resulting in 380 requests being made for repayment and $3.8m being clawed back.

$132.6m had also been voluntarily returned by employers.

 

Comments

Busy man! Wherever he is.

drivesouth-pow-generic-1.png

 

Advertisement

postanote_header_620_x_80.png

postanote_620_x_25.jpg

Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter