A company which provided gift cards for local councils and other organisations has gone bust, and it now transpires it did not have a licence to operate either, broadcaster NOS said on Friday.

The now-bankrupt company worked with more than 100 municipalities to issue prepaid cards for low-income residents or informal carers.

Some €14 million in public funds is now missing following the collapse of both the company and the foundation that was supposed to safeguard the money.

According to court-appointed administrator Carry Dullaart, funds stored on the cards appear to have been transferred from the independent foundation which held the money to Groupcard itself.

Although the Dutch central bank would not confirm whether an investigation is ongoing, a source close to the bankruptcy told NOS a probe into Groupcard has already begun.

The bank has confirmed that Groupcard was not licenced as an electronic money institution, a requirement for firms handling large prepaid balances. Nor had the company ever applied for such a permit.

Under Dutch law, large gift card issuers must store the balances on a separate account managed by an independent foundation. This setup is intended to prevent losses in case of bankruptcy or misuse, and to protect against money laundering.

Foundations are not allowed to lend money, make investments, or transfer funds back to the operating company. “It appears that the foundation’s resources were used to cover Groupcard’s losses,” Dullaart said.

The case raises questions about the lack of oversight from both local councils and the financial authorities, NOS said. Gift cards were used in cities including Haarlem, Zwolle and Zaandam, as well as smaller towns like Woerden and Zwijndrecht.

Dullaart stressed that staff were not to blame and had worked hard to keep the card system running and support a possible restart.

NOS said Groupcard owner Keunen could not be reached for comment.