Forestry company in liquidation received $40k grant payout

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Trust unaware until six days after processing second payment

A cyclone recovery grant was issued to a forestry company nearly three months after it ceased trading and 12 days after it went into liquidation, Regional Economic Development Agency Trust Tairāwhiti has confirmed.

The trust was responsible for distributing the Government’s cyclone recovery grant scheme here, including a total of $40,000 to Tokomaru Bay’s Abushman Contractor, which went into liquidation on April 28.

“In the application form, businesses declared that they were operating and viable before Cyclone Gabrielle and would continue to be viable after the event,” a trust spokeswoman said.

“Initially, we could only pay businesses up to 43 percent of the amount requested due to the demand well exceeding the available funding at the time.

“The Government subsequently allocated more funds for the region, enabling the trust to make a second payment to approved applicants that lifted the grant amount closer to what was originally requested.

“The second payment to Abushman Contractor was processed on May 10. However, we were not made aware the company had gone into liquidation until May 16.

“We have been communicating with MBIE and will continue to notify them about any businesses of concern. We will work with MBIE (Minstry of Business, Innovation and Employment) around auditing grants and recoup funding where required.”

The liquidator’s report states Abushman Contractor Limited (the Company) was placed into liquidation at the High Court in Auckland on

April 28, 2023, on the application of the Commissioner of Inland Revenue.

“The director has submitted a Statement of Affairs for the company and confirmed that the business ceased trading on February 11, 2023”

“Although no financial statements have yet been obtained from the company’s accountant, through the liquidator’s investigations and information provided by the director the liquidator has realised funds held in the company’s business bank account ($34,796.01) and the funds are now retained in the liquidator’s trust account.

“Extant assets have also been identified, including some pruning equipment and gear, vehicles and an overdrawn shareholder’s current account.

“The liquidator has found that some vehicles previously belonging to the company have changed ownership after the commencement of liquidation.

“This will be investigated with the assistance of the director in order to establish if proper consideration was given and whether this issue will be worth pursuing.

“Depending on the result of this investigation, it will be considered whether a referral to the liquidator’s compliance team will be appropriate for a potential breach of the Companies Act 1993.

“Thorough investigations are ongoing. The liquidator will pursue the accountant for the company’s financial records to complete an accurate index of all the company’s assets, as well as quantifying their realisable values.

“It is expected that this investigation will be completed within six months.”

Applications for business support grants closed on April 16. All have been processed.

A total of 877 applications were received and processed, with $16.32m paid out.

Trust Tairāwhiti last month confirmed it was aware of four suspected fraudulent applications to the Government’s cyclone recovery fund for the Tairāwhiti region.

Those matters all in relation to individual grants of $17,531 were referred to the police and MBIE.