West Coast businessman slams Development West Coast for lack of support

Friday, 16 March 2018

A businessman has slammed Development West Coast for not being more supportive of his now failed firm.  

Westland Contractors director AJ Gillman declined to comment, but wrote on Facebook that he felt 'gutted and heartbroken'. 

'Just had to tell my guys they don't have jobs anymore, one of the hardest things anyone has to do I think. They have all been loyal to me to the end, now feeling like I have let them down,' he wrote. 

He said at its peak Westland Contractors employed 40 staff and 'turned over seven figure numbers annually'.

READ MORE: Development West Coast reports annual loss of $1m

'We fell into trouble after taking on a large roading contract … We thought we could handle this but unfortunately couldn't, we are currently in mediation talks for a sum of $4,038,000, which we have been carrying for over 12 months now. This has got us into the position we are in now,' he said. 

It is understood the contract was the SH73 Mingha Bluff realignment. 

A tax debt forced Westland Contractors into liquidation and later, receivership, after Development West Coast launched legal action to recoup some of the money it loaned the company.

DWC was set up as a charitable trust in 2001 to manage a $92m compensation package from the Government, in part to offset the end of indigenous timber logging.

'Westland Contractors borrowed $340,000 off DWC to get us out of a pickle during the Christmas break. We had 35 staff on our books and a reasonable turnover,' Gillman said. 

He paid $150,000 of the debt in the last three months, but DWC were 'still chasing', he said.

'My question is this, how can DWC write off $1.4m in debt to Cranley Farms who employ 12 people yet threaten to bankrupt me for a debt of $300,000, minus interest is only $200,000 yet we employed 35 to 40 people, can someone please explain this to me?  Aren't these people (DWC) here to help booster local jobs and economy?' he asked. 

'They gave me a mentor which I took on board and he helped me immensely, then they took him away and all they wanted was their money back. They even took me to court over it.'

DWC chief executive Chris Mackenzie said DWC appointed receivers to the company following liquidation by Inland Revenue. 

He said DWC lent $375,000 to the company in 2015 and was still owed $280,000.

'DWC had discussed the debt with Mr Gillman and his advisers for two years.  Last year, DWC began bankruptcy proceedings against Mr Gillman personally, rather than against the company, so that Westland Contractors could continue to trade. DWC only began action against the company when it became obvious the Inland Revenue were moving to liquidate Westland Contractors. Once WCL was liquidated DWC moved to protect the trust's security,' he said. 

'We understand that at the time of the receivership WCL employed 10 staff. 

'DWC did not take away the mentor, that appears to be a decision made by Mr Gillman when the subsidised mentoring ceased.  We had arranged for the mentoring and subsidised the cost of the mentor for circa six months. Westland Contractors paid 25 per cent of the cost. Mr Gillman engaged new advisers following this period.  We are pleased Mr Gillman found the mentor beneficial,' Mackenzie said. 

He said DWC had not written off any investment in Cranley Farms Ltd, but conceded about $5m of the $12m investment was 'impaired' in DWC's accounts. 

Mackenzie defended DWC's support for West Coast businesses. 

'DWC supports many West Coast businesses through lending and other investment, arranging mentoring and advice, running networking and training events.  We promote the business awards and have helped fund R&D projects. In addition DWC fund assets in the community that makes the West Coast a better place to live, helping businesses to attract staff.  DWC has also provided significant funding to providing regional facilities (such as the $5m invested in the Westland Wilderness Trail and Old Ghost Road cycleways), which allow tourism operators to expand accommodation, transport and other related businesses.'