Nelson firm out of pocket over cup

BILL MOORE
Last updated 13:00 11/02/2013

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A company owned by disgraced Auckland tycoon Allan Hawkins has gone into receivership and liquidation, owing Nelson's Kidson Construction nearly $50,000 in unpaid bills and costs around the city's temporary Rugby World Cup seating at Trafalgar Park.

Seating Systems Ltd went into receivership on January 24 - the day before it was placed in liquidation after an application by Kidson.

Two other Hawkins companies are demanding payments totalling nearly $6 million from Seating Systems, and it was Mr Hawkins who called in the receiver, effectively giving himself first bite at the seating company's assets.

Mr Hawkins, the former Equiticorp boss, was given a six-year jail sentence in 1992 for fraud, the main charge centring on a $66.5m fee paid to him through complex foreign exchange transactions.

He has since been back in business as chairman and chief executive of publicly listed investment company Cynotech Holdings. Companies Office records show that Mr Hawkins and family members are the biggest shareholders in Cynotech Holdings and Cynotech Securities, which in turn own all the shares in Seating Systems.

When Mr Hawkins bought into Cynotech in 2004, the share price immediately rose from eight cents to 28c - a reaction to investors' continuing belief in him despite Equiticorp's collapse in the wake of the 1987 sharemarket crash. They were last traded at the end of November last year at 2c.

A 2012 mid-year report said Cynotech was "still pursuing" delisting from the New Zealand Stock Exchange, and that "profitability is still very much a problem".

Kidson Construction general manager Matthew Kidson said the company's scaffolding division dealt with Seating Systems on the installation of the temporary seating at Trafalgar Park in 2011. While Seating Systems had paid some of the early bills, it still owed just under $40,000, with legal costs adding just under $10,000.

He understood that other companies around New Zealand could also be owed money by Seating Systems.

Mr Kidson said the job had been negotiated through the scaffolding division, and it wasn't until the longstanding unpaid bill was brought to his attention that he realised his company had been dealing with "the Allan Hawkins".

If he had known this from the outset, "I think I would have looked at things quite a bit differently", he said.

Mr Kidson said he had pursued the bill through the High Court, which had determined that the debt was payable.

Seating Systems then claimed it had been overcharged. This had led to arbitration, which slightly reduced the total but determined that the bill should be paid.

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Kidson Construction then sought the liquidation, but was forestalled by the receivership.

Mr Kidson said the unpaid bill was "not a big enough number to worry us", but it was frustrating to know that the receivership would further disrupt the settlement process.

"We trust that the Kidson-appointed liquidator will conduct a thorough investigation of Mr Hawkins' management and operation of the company."

Rotorua-based receiver Derek Farrelly did not reply to a request from the Nelson Mail for comment. Liquidator Rhys Cain, of Ernst and Young, said he had yet to get the financial details of the company and did not yet know how much it owed to creditors.

Cynotech Holdings and Cynotech Securities were seeking $4.16m and $1.73m respectively from Seating Systems, he said.

"We haven't yet seen the evidence that the debt exists."

As liquidator, he had a duty to see that the receiver had been validly appointed, he said. "We are going through that process at the moment, and we will work with the receiver as we do so."

Mr Cain said he hoped to meet with Mr Hawkins and Mr Farrelly in Auckland next week. "We're just waiting to receive some dates when Mr Hawkins is available."

A receiver was there to act first and foremost in the best interests of their appointer, the secured creditor, he said. A liquidator was appointed with a view to acting in the best interests of all the unsecured creditors.

Mr Cain is required to make his first report 25 working days after being appointed. Mr Farrelly's first report as receiver is due to be filed with the Companies Office on March 28.

- The Nelson Mail

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