Liquidators chase Computer Power funds
Liquidators are fighting to retrieve $9.5 million from the director of a training institute after they say the money was redirected to his Australian companies before going bust.
Computer Power (NZ) Ltd, which ran Computer Power Institute campuses in Wellington, Christchurch and Auckland, was put into liquidation in the High Court at Wellington in March.
Now its sole director, Andrew Horton, of Victoria, Australia, is being held personally liable for the debt left in New Zealand, including more than $8.3 million in tax, penalties and interest.
And despite 750 students having their fees covered under the company's insurance policy, nearly 140 ex-students owed refunds at the time of its demise are not - adding up to about $400,000.
PricewaterhouseCoopers liquidator John Fisk said he was holding Horton personally liable for $9.5 million of debt left in New Zealand.
"We're saying that he is personally liable for the debt that he has left in Computer Power."
While Horton did not have any assets PwC was aware of in New Zealand, it was seeking to have his Australian assets used to repay his debt.
"Investigations are continuing over there into assets that appear to have been transferred from that company to other Horton-related entities."
It had been decided to take legal action against the company director, he said.
"[Horton] hasn't been of any assistance to us."
Unsecured creditors - mostly students - were owed about $400,000.
One man considered an unsecured creditor is fleeting Computer Power student Srinath Lakka, 34.
When he pulled out of a computer networking course after just three days in June 2011, he was told his student loan debt of more than $7000 in fees would be refunded to Inland Revenue in 30 working days.
But when his statement in March showed that he still owed that in tax, he realised that the repayment never happened.
Despite now having a full-time job, he was struggling financially as his salary barely covered his rent and his daughter's kindergarten fees.
"I've got a family as well to take care of."
He had spent $300 for a lawyer to plead his case, but after more than eight months he still had a loan debt for a course he never completed.
"The college has literally failed to obey the rules. I trusted them."
Lakka wanted his debt wiped clean, and was considering taking the issue to the Insurance Ombudsman.
Fisk said if liquidators successfully retrieved the money, about $8m would go to IRD towards unpaid PAYE.
It appeared that about 90 per cent of students covered under the institution's insurance policy had been paid, totalling about $1.5 million.
NZQA deputy chief executive of quality assurance Tim Fowler said NZQA was working on the issue and was in regular contact with students.
Whitireia New Zealand Ltd is now providing the former institute's programmes under the brand name Computer Power Plus.
Horton did not return calls.