Eleven Auckland daycare or early childcare centre companies are in liquidation after licences were cancelled by the Ministry of Education and a WorkSafe prosecution after a tree toppled on toddlers.
Rising debts due to fines, falling numbers of children attending after the state's action and staffing issues were all said to be reasons for the failure of the business with the centres throughout Auckland.
Licensed insolvency practitioner Pritesh Patel of Patel & Co has been appointed. A report is due to be issued on the liquidations shortly.
The ministry said it had been working with the business to try to ensure it was meeting minimum standards of education and care. Cancelling licences was not a decision made lightly but the action was taken after non-compliance.
Companies Office records showed today the companies in liquidation are Discoveries Educare Target Rd, Discoveries Educare Browns Bay, Discoveries Educare Kolmar Rd, Discoveries Educare Kelston, Discoveries Educare Walter Rd Takanini, Discoveries On Gadsby, Discoveries Educare Mt Wellington, Discoveries On Lincoln Rd, Discoveries Educare Te Atatu Peninsula, Discoveries Educare Highland Park and Disclosure Educare.
The ministry cancelled five licences in a week and the Covid lockdown exacerbated matters at the daycare centres, sources said.
The owner attempted to have the centres reopened via court proceedings but was unsuccessful.
Rippan Sandhu and Ajit Singh are shareholders and directors in the businesses.
One source said issues which led to the businesses going into liquidation were numerous.
These included licence cancellations, Covid, falling numbers of children attending the centres due to publicity about the ministry's action, staffing issues, having qualified teachers, rising debt and an underdeveloped structure to cope with expansion.
The Herald reported last year how one of the companies was ordered to pay more than $200,000 after it failed to identify the danger posed by a dead tree that toppled and injured toddlers.
Four toddlers were seriously injured when the tree fell to the ground of the outside play area at Discoveries Educare in Newmarket.
A "large cracking noise" was heard as the tree collapsed on and around children and adults on November 8, 2016, Judge Eddie Paul said.
The four children were hospitalised, with a 2-year-old boy suffering several fractures, including two to his skull.
A girl suffered a serious facial laceration, described by her mother as being "down to the bone", which required revision surgery in 2018.
The court heard she has become self-conscious of her appearance, lost confidence and found it harder to make eye contact with people.
"And perhaps disturbingly now draws herself with a scar," Judge Paul said.
A victim impact statement written by the parents of the boy was read to Auckland District Court. They said their once outgoing, happy boy now appeared to be nervous all the time. He was fearful of trees, small spaces, being left alone and suffered from nightmares, the court heard.
Discoveries Educare Ltd was prosecuted by WorkSafe for failing to ensure so far as was reasonably practicable, the health and safety of workers.
The childcare centre was also prosecuted for failing to ensure the health and safety of other persons.
Patel said today it was too early to quantify debts owed to creditors but initial assessments were that there would be a shortfall, he said.
He intends to look at how the companies complied with the law and also at whether voidable transactions occurred.
Patel expects to have reports ready for all 11 companies by around December 29. The first report on Discoveries Educare will be out on Tuesday next week, he said.
Attempts were made to contact the owners but no response was received.