Jobs lost as Australia's Kit Digital is placed into administration

By InvestSMART · 7 Jan 2013

By InvestSMART ·
7 Jan 2013

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THE Australian arm of a global tech firm has gone into administration, leaving about 70 workers without jobs. Kit Digital Australia, a subsidiary of New York-based software group Kit Digital, was handed over to administrators on December 20. PPB Advisory administrators Nicholas Martin, Marcus Ayres and Stephen Longley were appointed to assess the company's finances.

The IT group has done work for the Australian government, NAB, Betfair and Foxtel.

Administrators said the Australian arm was forced to close after its parent company ran into financial difficulty. One former local employee told BusinessDay most staff had not been paid since November 25.

PPB Advisory, which met creditors on Friday, said about 90 workers were initially made redundant, with 15 to 20 jobs saved when contracts were moved to a new entity. It said the financial state of the company was being assessed, and would not reveal how much creditors were owed.

Other local subsidiaries, Idaptive and Hyro Digital, have also been placed in administration. Kit Digital took over Hyro last June.

The US parent company said in December it had dismissed Grant Thornton as the company's independent auditor and was undertaking a restatement of the company's financial statements for 2009, 2010 and 2011. The international group's clients include Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google and News Corp.

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Frequently Asked Questions about this Article…

What happened to Kit Digital Australia and why was it placed into administration?

Kit Digital Australia, the local arm of New York–based software group Kit Digital, was placed into administration on December 20 after its US parent ran into financial difficulty. Administrators from PPB Advisory were appointed to assess the company's finances.

How many jobs were lost when Kit Digital Australia went into administration?

The article reports about 70 workers were left without jobs. PPB Advisory later said roughly 90 workers were initially made redundant, with 15 to 20 jobs saved when some contracts were moved to a new entity.

Who are the administrators handling the Kit Digital Australia administration?

PPB Advisory appointed administrators Nicholas Martin, Marcus Ayres and Stephen Longley to manage the assessment of Kit Digital Australia's financial position.

Which clients and contracts could be affected by Kit Digital Australia's collapse?

The Australian IT arm had done work for the Australian government, NAB, Betfair and Foxtel. The international Kit Digital group also lists clients such as the Associated Press, AT&T, BBC, BSkyB, Disney‑ABC, Google and News Corp.

Were Kit Digital Australia employees being paid before the administration?

A former local employee told BusinessDay that most staff had not been paid since November 25. Administrators are assessing the company's finances and have not disclosed details about creditor claims or unpaid amounts.

What happened to other local subsidiaries related to Kit Digital?

Other Australian subsidiaries, Idaptive and Hyro Digital, were also placed into administration. The article notes Kit Digital acquired Hyro last June.

What actions has the US parent company of Kit Digital taken regarding its financial reporting?

The US parent company said in December it dismissed Grant Thornton as its independent auditor and was undertaking a restatement of its financial statements for 2009, 2010 and 2011.

Will creditors and suppliers be paid and has the amount owed been revealed?

PPB Advisory said it is assessing the financial state of the company but would not reveal how much creditors were owed. At this stage the article does not provide information on whether creditors or suppliers will be paid.