Jane Howarth: PIPO boss gave herself $175K loan, report alleges

A report into the collapse of a Tasmanian labour hire firm has alleged cash flow issues at the business were partially due to the director giving herself an enormous loan, unlikely to be paid back.

Jane Howarth, director of Partners in Professional Outsourcing Pty Ltd and former co-owner of Pedro's Takeaway Ulverstone. Picture: Facebook

A report into the collapse of a Tasmanian labour hire firm has alleged cash flow issues at the business were partially due to the director giving herself a $175,000 loan, which is unlikely to be paid back.

West Ulverstone-based Partners in Professional Outsourcing Pty Ltd was wound up by Penguin director Jane Howarth on December 21 last year after it incurred significant debt, initially estimated by Ms Howarth to total $1,399,611.52.

Ms Howarth has since announced the founding of a new business, NW Bookkeeping and Business Solutions, with her former employee Joe Draper.

According to the statutory report to creditors, filed last week with corporate watchdog ASIC by liquidator Michael Slaven, PIPO’s estimated debt has been revised down to $1,191,949, based on creditors that have submitted proof of debt forms thus far.

Mr Slaven said PIPO’s collapse was due to “undercapitalisation, labour shortages, lack of attention to gross profit margins and other key financial indicators leading to a failure to adjust pricing and to control expenditure (and) failure to provide for superannuation and taxation obligations partially as a consequence of loan advances to the director”.

Ms Howarth in her capacity as company director had given herself personal loans totalling $175,879, the report alleged.

“I have issued the director with a demand for repayment of this amount. Based on representations from her, which are unsubstantiated at this stage, she does not have the capacity to repay,” Mr Slaven said.

Follow @humidityreport

Mr Slaven concluded PIPO traded while insolvent from “at least” September 14, 2020, the date when PIPO “began to accrue a liability for employee superannuation which it has failed to satisfy”. The Australian Taxation Office has claimed $194,283 by way of unpaid superannuation guarantee charges, although Mr Slaven said that figure is unverified.

Mr Slaven said PIPO incurred $744,795 worth of debt after the date he believes the company became insolvent. Directors can be liable for debts incurred after this date.

“The director maintains that she does not have capacity to meet any claim that may be brought against her,” Mr Slaven said.

“Notwithstanding this I intend to proceed with issuing a demand for payment and if necessary, will invite the director to provide evidence of her claimed impecuniosity from which I will make a decision as to the merits or otherwise of proceeding with a claim.

“I intend to notify ASIC that the director may have breached her statutory duties with respect to insolvent trading.”

Mr Slaven said there was little chance unsecured creditors, who are owed a combined $990,085, according to the proof of debt forms submitted thus far, will receive a dividend. The lion’s share of the unsecured debt is owed to the ATO by way of missed PAYG withholding.

Ms Howarth, a former co-owner of Pedro’s Takeaway Ulverstone, did not return the Mercury’s call on Monday afternoon.

She previously told the Mercury the winding up of PIPO was to “gain some much-needed life balance”.