A recent report by liquidators revealed that around 145 staff, primarily immigrants from South America, have been fired or made redundant by labour recruiter Buildhub. 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, as reported in an article by The New Zealand Herald.
Buildhub, owned by Mariela Andrea Ehijo Contreras and Monsan Enterprises and Investments, was found to have $2.2 million in liabilities, including a $1.3 million debt to Inland Revenue and $219,391 in unpaid wages and holiday pay owed to employees. Assets totalling $2.1 million were identified, including $762,000 in intellectual property, $669,000 in trade receivables, $108,000 in fixed assets, and $235,000 in related party receivables. However, Hoole and Cox questioned the valuation of the intellectual property and were still assessing other asset book values.
The liquidators emphasized the need to collect outstanding debts, stating that the company has several debtor balances. Buildhub was an approved employer under Immigration New Zealand's Accredited Employer Work Visa scheme and was previously under investigation for alleged exploitation of migrant workers, though it was cleared of any criminal wrongdoing.
Buildhub's collapse follows a similar fate for ELE, a larger labor business recruiter, which went into receivership owing $12.3 million and leaving over 1000 staff, including 750 from the Philippines, in a precarious situation. Buildhub owed secured creditors $185,000 and shareholders $359,000 in loans.
The company, incorporated in 2019 as a labor-hire and workforce provider, moved into large-scale labor recruitment via a digital platform, attracting skilled migrant workers mainly from South America. However, issues arose in mid-2023 when allegations of poor treatment and improper labor practices surfaced, leading to adverse media coverage and reputational damage.
Despite being cleared of wrongdoing by Immigration New Zealand, Buildhub's reputation suffered, resulting in debt recovery and cash flow issues. The company's director blamed the media and staff for its failure, citing the spread of allegations and subsequent operational challenges.
Buildhub had exhausted all available funding and was unable to meet its obligations to employees, Inland Revenue, creditors, and other payables. The liquidators acknowledged that while Buildhub's grievances had been resolved, adverse media publicity had significantly impacted its financial stability.
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