Buildhub liquidation: 145 South American immigrants laid off, liabilities $2.2m

South American migrant workers say they are still waiting to be paid following Buildhub's liquidation. Photo / Michael Craig

Around 145 staff who immigrated from South America have been fired or made redundant from labour recruiter Buildhub, the first liquidators’ report said.

Gareth Hoole and Raymond Cox of Ecovis KGA in Newmarket laid off 115 people immediately after Buildhub’s owners hired them, but 20 to 30 staff were already made redundant shortly before that, they said.

Buildhub, owned by Mariela Andrea Ehijo Contreras and Monsan Enterprises and Investments, has $2.2 million in liabilities which include a $1.3m debt to Inland Revenue and $219,391 wages and holiday pay owed to employees, the liquidators found.

Assets were put at $2.1m including $762,000 intellectual property via the company’s digital platform, $669,000 owed in trade receivables, $108,000 fixed assets and $235,000 related party receivables.

But Hoole and Cox said the $762,000 intellectual property valuation was “questionable” and they were yet to ascertain other asset book values.

“The company has several debtor balances which require collection. The liquidators will pursue outstanding debtors using all available legal remedies,” their report said.

The Herald reported yesterday how more than two dozen migrant workers used their life savings to immigrate here but say their future is in limbo after the liquidation.

Norma Schwenke is helping the ex-Buildhub employees from South America. Photo / Michael Craig

Buildhub was an approved employer under Immigration New Zealand’s (INZ) Accredited Employer Work Visa scheme.

It was also at the centre of an INZ investigation following allegations about duping migrant workers into coming to New Zealand on fake job contracts but was cleared of any criminal wrongdoing earlier this month.

The company accused employees of missing work on purpose, working for “cash under the table” and being directed by external organisations and individuals on “how to abuse the immigration system and apply for migrant exploitation visas”.

Buildhub’s failure follows bigger labour business recruiter ELE going into receivership just before Christmas owing $12.3m, according to Deloitte. ELE had more than 1000 staff, including around 750 from the Philippines, some forced to sleep in cars after being fired.

Hoole and Cox said Buildhub owed secured creditors $185,000 and shareholders $359,000 in loans.

Fernando Gonzalez with his wife Ximena and their children Emilia, 11, and Vincente, 9. Photo / Michael Craig

“The business had ceased trading from the day of the appointment of the liquidators and the company’s remaining 115 employees had their employment terminated by the liquidators ... The liquidators understand that an additional 20 to 30 employees had already been made redundant by the company prior to the appointment of the liquidators,” the report said.

Hoole and Cox named some creditors of Buildhub as Bunnings, lender Prospa, Seascape (2010), CP Auckland LP via property investor Oyster Group and lender Bizcap NZ as creditors. There were “numerous individuals” also claiming money but for privacy reasons their names and contact details had been withheld.

The company was only incorporated in 2019 as a labour-hire and workforce provider that on-hired staff.

In a cruel twist, the report cited the company’s director blaming the media and staff for its failure. The sole director is Daniel Ramirez Ordas of Ellerslie, the Companies Office shows, although Mariela Contreras of Ellerslie only ceased to be a director on February 11.

“The liquidators understand that the company was granted approved employer accreditation from Immigration New Zealand in 2022 and moved into large-scale labour recruitment via a digital platform which was utilised in overseas countries, mainly in South America, to attract skilled migrant workers to New Zealand.

“The first contingent of overseas employees arrived in New Zealand in November 2022. The liquidators have been advised that the business was loss-making and no longer a viable commercial proposition.

From left: Nicole Orostica and Victor Ortega with their daughter Victoria, 5, and Camila Ortega. Photo / Michael Craig

“The principal reasons for that situation, cited by the director, centred mainly around issues that arose around June – July 2023 when a group of employees allegedly colluded with other agencies and individuals, making allegations against the company of poor treatment and improper labour practices.

“These allegations were spread widely in the media, including in the target countries where migrant workers were being sourced, resulting in the fundamental operation of employment of personnel being hampered. Immigration New Zealand was approached by the company’s officers voluntarily and an investigation was conducted,” the report said.

Hoole and Cox had seen an Immigration New Zealand document exonerating Buildhub from claims of migrant trafficking and exploitation, stating that it would not be issuing any criminal proceedings.

Immigration New Zealand did, however, refer the complainants to employment services. The liquidators understand that no further action against Buildhub has been deemed warranted via those channels, all such grievances having been satisfactorily resolved.

“However, adverse media publicity and the flow-on reputational effect led to debt recovery and cashflow issues, with clients taking advantage of the situation, even though Immigration New Zealand decided not to pursue this matter,” Hoole and Cox wrote.

The company had exhausted all available funding and was owed employees, Inland Revenue, creditors and other payables which it could not meet.

The shareholders provided funding but that was exhausted and there was no realistic prospect to continue trading, “considering the adverse publicity and reputational damage to the company”.

“The company has lodged an insurance claim for the losses incurred due to business interruption, which the liquidators are reviewing and pursuing with the insurance underwriter,” the report filed on Friday said.

* Glenn McBride of Buildhub Southland 2017 said his company was not related to the business in liquidation.

Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.