Steadfast cuts all ties with troubled Kiwi brokerage

Steadfast cuts all ties with troubled Kiwi brokerage

Steadfast cuts all ties with troubled Kiwi brokerage Broker networks Steadfast Group and PSC Connect have severed ties with a former New Zealand member of the group, troubled broker Global Cover Insurances.

The Kiwi brokerage was slapped with an order to pay a former employee $40K by a New Zealand body the Employment Relations Authority (ERA) last week.

Steadfast Direct & New Zealand EGM, Allan Reynolds, issued a joint statement to Insurance Business on Friday on behalf of both Steadfast and PSC confirming:

“Global Cover Insurances is not part of PSC Connect NZ or the Steadfast network of insurance brokers.”

Reynolds said the brokerage had been using information about Steadfast without their permission, despite not being members for ‘quite a while’ and had been requested to remove any reference to PSC Connect NZ and Steadfast from their website.

Up until yesterday Global Cover was still promoting itself as a member of both networks on the Partners page of its website.

It had also copied the Steadfast tagline of ‘strength when you need it’.

All references have now been removed.

The brokerage was in the spotlight last week after the ERA ruled it had constructively dismissed one of its employees, Mustafa Bhamji and ordered it to pay Bhamji $40,883.95.

The circumstances surrounding Bhamji’s constructive dismissal occurred late last year.

The brokerage had told Bhamji he had been given company shares. While he was surprised by the gesture as there had been no discussion about it, Bhamji took it as a sign of his success within the company, the ERA was told.

However, soon after that, when Bhamji did not receive his fortnightly wage, he was told by company director Jiuria Raijeli (Rachael) Mario that the company had no funds or income.

As he was now a shareholder, Bhamji was asked to take out a personal loan to help the company pay for its debts and his wages.

Bhamji refused as he could not service the loan, the ERA ruling notes said.

When Bhamji approached the ERA to recover his wages, the company confiscated his company car, work phone, and files.

Bhamji’s wife was also approached by Mario at work without warning and was threatened with legal action.

The Bhamjis felt that this was a breach of their privacy and was ‘very distressing’, so much so that Mustafa Bhamji required medical support afterwards.

The $40,883.95 fine covered compensation and owed wages as well as $21,751.90 in PAYE arrears to Inland Revenue.

Insurance Business made contact with Global Cover whose director Nik Naidu emailed back saying he was happy to have a chat about the ‘sad state of affairs with this saga’.

In the ERA ruling, Global Cover was recorded as blaming its lack of funds on Bhamji not performing to expected levels, and being the sole employee managing the business income.

“Mr Bhamji disputes that,” ERA member Rachel Larmer said in her report, adding: “There is no documentation to back up Global Cover’s allegations about this.”

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