Alvarez & Marsal called in on MA Services collapse days before Christmas

Alvarez & Marsal has been brought in to oversee the administration of security and maintenance company MA Services following its collapse just before Christmas.

The Age began reporting on MA Services Group last month, levelling allegations of business links to bikies, sexual harassment claims against founder Micky Ahuja, and ultimately that the Australian Tax Office was pursuing a $20 million claim against the company.

The exposure led to the withdrawal of contracts from a number of prominent organisations, including the Melbourne Football Club, property consultancy CBRE, and the University of Sydney, with Ahuja then stepping down from his role as chief executive.

Now, on the eve of Christmas, MA Services has entered voluntary administration, with more than 1,000 security guards abruptly sacked across the nation, leaving major retailers such as Coles, Dan Murphy’s, Bunnings and Kmart scrambling to secure their outlets during one of the busiest shopping times of the year and some 1,700 employees facing an uncertain future.

Alvarez & Marsal appointed administrator

Called in as administrators, a note from Alvarez & Marsal (A&M) explained the regretful terminations: “The appointment of administrators has triggered breaches of key licensing conditions, meaning the company is unable to lawfully continue certain core functions. Given this, and the liquidity position of the company, we have no alternative but to cease trading the business effective immediately.”

Alvarez & Marsal restructuring & turnaround lead Jason Tracy and managing director Glen Kanevsky, who officially joined the firm from Deloitte earlier this year upon the launch of A&M’s local restructuring practice, also face a disrupted holiday period, running point on the administration and attempting to secure unpaid workers entitlements and rescue countless jobs.

“We recognise the seriousness of this situation for the 1,700 employees whose roles are directly affected,” Alvarez & Marsal said in a statement. “We are engaging with the Fair Entitlement Guarantee (FEG) team within the Department of Employment and Workplace Relations to ensure employees receive the support they need regarding their entitlements.”

The pair also said they are currently investigating the circumstances of the collapse, including seeking information from Ahuja, who founded MA Services more than a decade ago and built it into a multi-million dollar business, but Tracy and Kanevsky are likely to have their hands fuller than usual, with further allegations against the company of shady, off-the-books practices.

That includes opaque external labour hire arrangements and worker exploitation, with a large percentage of MA Service’s workforce said to be drawn from the transient migrant community, such that those who aren’t permanent residents won’t be entitled to standard safety nets such as unemployment benefits amid concerns staff won’t even be paid for their past fortnight in wages.

It also means that the true number of workers ‘employed’ by MA Services who have now lost their low-paid income source in the middle of a cost-of-living crisis may be vastly understated. In addition to occurring in the build-up to Christmas and Boxing Day sales, the collapse also comes during a busy summer event season, and when the nation is currently at its highest levels of alert.

Misconduct?

MA Services had previously denied the allegations of misconduct in a statement issued at the beginning of the month; “MA Services Group acknowledges the recent media coverage and the concerns raised in relation to the organisation. We take these matters seriously and want to reaffirm our position clearly and transparently. We categorically deny any wrongdoing.”

Meanwhile, following the shock redundancies, and with services competitors reported to be already showing interest, A&M said that the firm was “evaluating a range of options to preserve continuity of services and future employment opportunities wherever possible. This includes fielding enquiries from a number of parties that may be interested in acquiring the company’s assets”.