Receivers appointed to early childhood services Rainbow Corner, Porse

Receivers have been appointed to childcare services Rainbow Corner and Porse, with their licenses and operations suspended with immediate effect.

Stephen White and John Fisk of PwC said they had been appointed as receivers of The Rainbow Group of Companies, which includes 13 Rainbow Corner early childhood education centres (ECE) across New Zealand, a network of Porse in-home based childcare providers and a private training establishment, which together employed about 130 staff.

“We are yet to have fully established the factors contributing to the financial issues faced by the group, but expect that suspensions and cancellation of a number of ECE licenses – which have attracted recent media scrutiny – will have contributed,” White said.

A consequence of the receivership is that any ECE licenses held by companies in receivership were automatically suspended upon the appointment of the receivers. Accordingly, the receivers have had to suspend childcare operations with immediate effect.

READ MORE:
* Inland Revenue applies to liquidate Rainbow Corner
* The Jugglenaut: How childcare became a for-profit game
* National childcare operator under scrutiny over missing pay and spending of $3.2m Covid-19 subsidy

“We appreciate that these closures will cause a number of families significant disruption in the coming days, but unfortunately there was no alternative option under the circumstances,” White said. “The receivers are working closely with the Ministry of Education to minimise the impact on families to the greatest extent possible”.

Inland Revenue had earlier applied to put the Rainbow Corner Group of Companies, and three subsidiaries, into liquidation. The application was to have been heard in the High Court at Auckland on March 24.

The Rainbow Corner Group is owned by Rrahul and Bhavini Dosshi.

A number of educators had contacted Stuff, raising concerns about not having received pay.

And earlier this month, the Ministry of Education confirmed six Wellington Porse early childhood educators had given up their licences, with 186 children registered between them.

Earlier in the year, the ministry suspended nine Porse licences in Auckland and Christchurch, and auditors had been brought in to investigate operations.

White said the receivers will be briefing staff and contacting customers and other stakeholders in coming days to update them on the impact of the receivership, while also determining options available to maximise recoveries for the group’s creditors.