A hair and beauty products company owned by a man who ran what is thought to be a significant ponzi scheme owes more than $1.4 million.
The possible sale of the company has also been shelved after suppliers pulled out following the company’s receivership.
Christchurch-based Boutique Hair & Beauty, which supplied international hair and beauty product brands to salons across the country, was in February tipped into receivership.
Its majority owner, Paul Clifford Hibbs, was last year named as being under investigation by the Serious Fraud Office (SFO) and Financial Markets Authority (FMA), relating to another of his companies, Hansa.
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The SFO and FMA have not provided further details, but last September investor John Docherty and his wife claimed they had been left stranded after allegedly being swindled out of $650,000.
Multiple sources have since said Hansa investors have been told at least $20 million was missing.
The receiver for Boutique Hair & Beauty, PWC partner Malcolm Hollis, said in February the receivership was on Hibbs’ request following discussions he had had with one of the main banks.
The receivership was not because of a business failure but because of an issue with its ownership.
“It’s pretty self-evident in terms of Mr Hibbs’ current situation,” he said.
“He’s got wider issues to deal with.”
The business, which had 16 staff, would continue to run and Hollis said he was fairly confident he would find a buyer.
But the first receivers’ report for the company, released Wednesday, said there was no longer a viable business to sell.
This was because supplier agreements were terminated with the receivership, and the main supplier had decided to choose their own new distributor.
The report said creditor claims totalled more than $1.4m, including $1.15m to ANZ Bank.
Unsecured creditors had claimed $80,000, but receivers said this was likely to increase.
“From our observations to date we believe that there are unlikely to be any funds available for unsecured creditors.”
Three employees were still with the company as it looked to sell stock and wind down.
One former employee said last month she, and “all the amazing people” she worked with at Boutique, were suddenly out of a job.
“The story behind our abrupt terminations is an improbable one,” she said.
She declined to comment further.
The company Hibbs owned which was under investigation, Hansa, was in January put in liquidation on application by the investor who claimed to have lost $650,000.
Waterstone Insolvency liquidator Damien Grant said in December they had so far identified payments of at least $9m into the company.
Freezing orders were obtained over all of Hibbs’ assets, while Grant’s investigations to date showed Hansa had failed to invest and manage funds in accordance with agreements signed with investors.
“Instead, the company appears to have been run as a ponzi scheme under which investors’ funds appear to have been misappropriated,” liquidators said.
“It appears that a number of related entities, in particular Cameron Gladstone Investments, are similarly involved in the fraud.”
The report said it was too early to know if any distribution would be made to investors.