Director’s absence cause for concern

A West Coast mining company claimed more than $84,000 through the wage subsidy scheme before its director disappeared and the business went into receivership.

According to the Ministry of Social Development’s (MSD) wage subsidy register, Capital A & M in Hokitika received $84,335 for 12 staff under the scheme launched on March 17.

But nine days later, on March 26, Capital A & M went receivership.

Receiver Thomas Rodewald said in his first report that creditors had become concerned about the absence of director Jacobus Kotze and the security of the company’s assets.

Kotze was overseas and ‘‘has provided some information by email’’, Rodewald says in his report. It was unclear if he would be returning to New Zealand.

Rodewald said Capital A & M owed almost $2.1 million, including $36,000 to staff and $73,000 to Inland Revenue, and Kotze’s shareholder current account was into overdrawn $74,416.

So far, $65,000 had been recovered, including $55,000 of wage subsidy funds recovered from two sources.

Rodewald said the remainder of the money was gone and was not recoverable by the receiver.

Rodewald told Stuff he had MSD approval to pay affected Capital A & M staff two weeks’ wages from the recovered funds but a request to pay any more had been refused for ‘‘technical reasons’’. He believed Kotze was in either the United States or Australia but his phone had been disconnected. Stuff’s attempts to contact Kotze unsuccessful.

Capital A & M was established in 2018 and provided earthworks, landscaping and cartage services in the West Coast area.

According to the company’s website, Kotze previously owned and operated a mining firm and a brick manufacturing and quarry company in South Africa.

The Government-funded wage subsidy was available for businesses which experienced a minimum 30 per cent decline in revenue over a month, when compared with the same month last year, and that decline was by email were related to Covid-19.

The Government paid out more than $11 billion in the original wage subsidy scheme, which covered each employee at eligible companies for 12 weeks.

It has extended the scheme by eight weeks for businesses which had experienced a revenue drop of 40 per cent or more.

MSD has described the scheme as ‘‘a high trust system aimed at ensuring money reaches workers and businesses as soon as possible’’. The Government said businesses found to have abused the system could face criminal prosecutions.