Palmerston North RSA goes into receivership
'Bad decisions' blamed for money troubles
Bad investments and losing the original purpose of the organisation are being blamed for Palmerston North Returned and Services Association having to close its doors and call in the receivers.
An emotional George Mathew, president of Palmerston North RSA, said yesterday he was ''devastated that it has come to this'' as the plug was pulled on the club.
''It is a very sad time for this RSA'', said Mr Mathew, ''but after a decade of trading losses, the situation is now that the RSA runs the risk of trading insolvent and this step is now necessary''.
He said the original purpose of RSAs was to look after war veterans but he believed that focus had been lost in other business ventures that were not profitable.
In a statement late yesterday reference was made to ''a legacy of some very unfortunate and unwise business decisions and many instances of unnecessary and wasteful recurring spending''.
The receivers are David Ruscoe and Tim Downes of Grant Thornton NZ Ltd.
Mr Mathew told the Manawatu Standard the RSA went into the motel business and lost $64,000 in the first 11 months.
''We lost a huge amount of money and that was totally predictable. We've made some really bad decisions in the past.''
He said for most members the RSA was a club to catch up with friends at and have a few drinks.
''The bottom line is we need to look after our veterans, particularly the elderly ones. That is the reason for us being here.''
Twelve months ago, the RSA building was put on the market to try to balance the books, but it remained unsold.
In the meantime, the RSA had continued to operate in the building. The RSA's financial performance had improved slightly in the past year, and from April to June it had traded around break-even, but from July onward it again lost money most weeks.
Mr Mathew said bringing in Mark Donaldson as general manager was a good move and money had been saved in overheads, but it was too late.
He said the changes would have made a difference in the long term but time was not on the RSA's side.
''I thought we might make it but we didn't, it's as simple as that.''
Some staff were dismissed several weeks ago and three bar staff and one administration staff member have been caught in the receivership crossfire and lost their jobs.
Mr Mathew said the RSA would continue, but in a different capacity.
''There will always be an RSA in Palmerston North but it will be in a different format now. I do not know how this will pan out, but it is my wish that the creditors are eventually fully paid.''
The RSA welfare office will continue three days a week.
The receivers could not be reached for comment.
- Manawatu Standard
Will you stay up to watch the Cricket World Cup final?