Hawke's Bay company collapses after Government recalls $106k in wage subsidies

The company operated livestock transport services. Photo / NZME

A trucking company has gone into liquidation after the government demanded it repay more than $100,000 of Covid-19 wage subsidies.

Waipukurau company Ben Allen Transport Ltd received $106,814.40 from the Covid wage subsidy scheme in April 2020 for 16 employees.

Its directors had applied for the money, believing the company would meet the government's qualifying threshold of a 30 per cent revenue decline.

However, a September 2021 ''post-payment integrity check'' revealed a 27.7 per cent drop - 2.3 per cent short of the threshold.

Following the 2021 audit, the Ministry of Social Development (MSD) demanded the company repay the money.

"Employers make a formal declaration at the time they apply for the subsidy which includes an acknowledgement that they understand they may be subject to civil proceedings for the recovery of any amount received that they're not entitled to," George van Ooyen, MSD group general manager client service support, said.

"We undertook a post-payment integrity check on the business in September 2021 as part of our integrity programme."

The company, which operated livestock transport services, repaid $6814.40 on December 15 last year, on the same day it went into liquidation.

Van Ooyen said that left a balance of $100,000 still owing.

The Ministry of Social Development demanded repayment of the Covid wage subsidy. Photo / NZME

Former owner Ben Allen declined to comment and referred Hawke's Bay Today to a colleague, who also declined to comment.

In September 2020, Ben Allen Transport's assets were sold and taken over by Farmers Transport Limited 2020.

Farmers Transport Limited 2020 is not involved in any way with the liquidation process or wage subsidy issues.

Some trucks used by Farmers Transport Limited 2020 still feature the brand name 'Ben Allen Transport', and the brand name surfaced as a sponsor for a Porangahau fishing competition last month.

Farmers Transport Limited 2020 told Hawke's Bay Today the brand was still being used as loyal customers were used to it, and it would be phased out over time.

The appointed liquidators, BDO, reported Ben Allen Transport had no assets when it went into liquidation.

"Ben Allen Transport Limited owned no assets at the time the liquidators were appointed, so no recoveries are available for creditors," a BDO spokesman said.

The spokesman said the company's directors believed they had met their legal requirements when they applied for wage subsidies.

"We are advised that the directors had anticipated, in conjunction with their accountant, a decline in revenue of over 30 per cent but MSD recalculated based on actual trading results and the decline was only 27.70 per cent," a BDO spokesman said.