A transport company which has ceased trading with the loss of almost 400 jobs was set to be wound up in Northern Ireland next week over an unpaid tax bill.
But before the case could be heard in Belfast, Revenue Commissioners in the Republic froze Target Express’s bank accounts last Friday, forcing it to close its doors. Ten Target Express depots north and south of the border have closed, with workers in Cork now staging a sit-in over two weeks' unpaid wages.
The Court Service confirmed that College Freight, part of the Target Express group of companies, faced a “winding-up petition” in Belfast High Court next Thursday (September 6) brought by tax commissioners at HM Revenue and Customs.
But the company’s MD Seamus McBrien insisted the Republic’s taxman was to blame for its demise, which has led to the loss of around 398 jobs — 100 of which are based in Northern Ireland.
The Irish Revenue Commissioners, while declining to comment on an individual case, argued that it is “not a lender of last resort” and could not be blamed for the job losses. They said they only freeze bank accounts as a “last resort” when the debt problem is “serious and intractable”.
Irish Transport Minister Leo Varadkar insisted that companies have to pay their taxes, although he hoped jobs could be saved.
Target Express, which was started by Seamus McBrien in his home town of Derrylin, had its bank account frozen by the Republic’s Revenue department late last week after failing to pay a tax bill of €300,000 (£240,000).
The company’s fortunes follow in the footsteps of the troubled Quinn Group, which also started in the Co Fermanagh town.
“Any hope of keeping the company going has gone,” Mr McBrien said. He added that its customers, which included a number of blue chip companies, would withdraw business once the “rumour mill gets around”.
Mr McBrien told the Republic’s Newstalk radio station that the company had been paying off its tax bill but the Irish Revenue wouldn’t extend its deadlines.
He said Target Express had paid €214,000 (£170,000) on August 20 and would have paid another €80,000 (£64,000) by August 24, two days after Revenue’s deadline.
By August 23, the tax department had placed ‘attachments’ on Target Express’s bank account, which essentially freezes money.
Mr McBrien said: “The Revenue have been the pain in my heart for the last six months. We tried to work with them but they would not work with us.” On Friday, Mr McBrien started the process of closing the company.
“We got attachment on Thursday which meant we couldn’t pay the wages on Friday. I wasn’t prepared to ask people to work for me if I couldn’t guarantee payment,” he said.
“My bank was prepared to pay them €175,000 (£140,000) directly to lift the attachment and then pay them €45,000 (£35,000) a week for the next four weeks but they said no.”
But 16 truck and van drivers at one of the haulage firm's depots in Cork said they will stage a sit-in until they receive two weeks' wages they say are owed to them, as well as redundancy payments.
Mr McBrien said Target Express was on course to make £1.6m this year. An employee was still manning the phones at its Newtownbutler office on Tuesday morning.
Sean McBride said employees had already been told the firm was closing but even so, he had come in to man the phones “as a matter of courtesy to customers”.
He was critical of the decision by the Republic’s tax authorities to freeze the company’s accounts.
He said: “(By closing the company down) they’ll be taking revenue out of the country and you would think that’s the very thing they need at the moment. The country needs companies like us.” Mr McBride felt the chances of Target Express being sold as a going concern were slim, given the specialist nature of its 24-hour delivery services which would be difficult to re-start after a prolonged period of closure.
College Freight Limited is the company that runs the Target Express business in the Republic, while College Freight Services Ltd runs the business in Northern Ireland.
Their ultimate parent company is Farnley Investments Limited & subsidiaries.
According to the most recent accounts available, in the year to the end of 2010, Farnley Investments & subsidiaries made a pre-tax profit of £1.9m on revenue of £29.9m.
The group paid tax on its profits of £317,000. By the end of the year, the group had a cash pile, known as shareholders funds, of £7.5m. Directors remuneration spiked from £20,000 in 2009 to £149,000 in 2010.
We don’t know what’s happening, we don’t know what the future holds, say workers
By Claire Weir
Driven by pride and passion — the legend emblazoned on the sides of the Target Express lorries, which now sit dormant in yards in Lisnaskea and Newtownbutler in the Fermanagh lakelands.
There was no pride or passion among the workers yesterday, just confusion.
A handful of workers in Lisnaskea made anxious calls to family members and kept an ear to the radio for more news on a situation they knew little about — their jobs under threat because of a row between their boss and the tax man.
Workers at both depots were reluctant to talk, but one man who has been working for Target for 12 years said that there was a deep sense of shock among employees.
“We don’t know what’s happening, nothing has been said, we don’t know what the future holds,” he said.
“We are getting all our information from the media at this stage as the management are not here. There is no anger towards Mr McBrien, we know he tried his best but the accounts were frozen so he could not pay us. His hands were tied.
“People are worried, I have a young family to support and there is no other work around here. All the men here are from no further than 10 miles away from the depot. We are all in the same boat.”
Alma Kinnear runs the Kissin’ Crust cafe in the town and said that the knock-on effects of the closure would be immense.
“It’s like a domino effect, the workers spend money in the town and that will be gone now,” she said.
“I have three staff in today and each of them have about five family members working for Target. The effect is immediate,” she added.
David McMullen and wife Sandra run the Dowler hard
ware shop on the main street. They said they also had many customers from the plant.
“There will be less disposable income in the area and that will be bad news for everyone,” said Mr McMullen.
“It is sad to see a homegrown, family-run business which seemed to be doing well, collapse like this.”
His wife added: “It was a real shock. It’s another nick on the gatepost for the area. I don’t know what people are going to do for work. The opportunities around here, between Target and the Quinn Group getting into trouble, are practically nil.”
Down the road in Derrylin, still reeling from the shock of the collapse of Sean Quinn’s cement, insurance and hotel empire, signs still adorn the lamp-posts declaring support for the embattled tycoon.
The Quinn lorries still roar between the two villages, but apart from that there was an eerie sense of quiet in the area and a sense of shock that a second Derrylin businessman is suffering the implosion of his business.
Andy Cairns, who runs an off-licence, said that no one is immune from the failure of two major firms in the region.
“My wife is from Clones, where Target has a depot, and she said it will be a huge setback,” he said.
“It would have been the main employer in the area. It’s another blow, this area cannot afford for something like this to happen, for another big employer to go under. A lot of other businesses rely on the bigger firms and now they will be worried.”
Ciaran Nolan said that people were perplexed about the circumstances behind the closure.
“Between the Quinn Group and now Target, the more I hear,
the less I understand,” he said.
“It seems like profitable businesses who are employing people are being targeted by the authorities and left with no choice but to let people go. I don’t know where anyone will end up working at this rate.”
One woman — who did not wish to be named — said she was a former neighbour of Mr McBrien, who now spends the majority of his time in Dublin.
“My husband and my son both worked for Mr McBrien and they both said he was the best person to work for that they ever met,” she said.