Police and ASIC had eyes on failed builder

 

THE liquidator of a failed central Queensland construction company has lodged a report with Australia's corporate regulator listing potential civil and criminal offences by senior officials.

According to Minutes of the Committee of Inspection meeting into the liquidation of JM Kelly Builders Pty Ltd held in Rockhampton, Queensland Police and ASIC were looking at the matters relating to company officials.

Under questioning from Committee of Inspection members, liquidator PwC said that Elizabeth, John and their father Geoffrey Murphy were the main parties identified to be pursued.

He said there were likely to be others.

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Geoffrey Murphy said his family denied all allegations and said any investigation would find there was no improper conduct.

PWC said data analytics were being used to review inter-entity related transactions.

The alleged payment of superannuation to related parties but not to other employees also would form part of the investigation, as would the use of corporate credit cards.

 

John Murphy and Geoff Murphy. Picture: Allan Reinikka / The Morning Bulletin
John Murphy and Geoff Murphy. Picture: Allan Reinikka / The Morning Bulletin

 

An attempt would also be made to claw back a preferential payment of between $250,000 and $300,000 made by the company to an unidentified government agency which may be used to fund a Public Examination into the company's affairs.

The Queensland Building and Construction Commission and the Department of Jobs and Small Business which administers the Fair Entitlement Guarantee may also be funding sources.

 

The liquidators told the Committee of Inspection it had a reasonable understanding of the likely causes of action.

The PwC liquidator has revealed other potential preference claims amounting to millions of dollars were also being considered which, if successful, may result in a dividend to all creditors.

JM Kelly Builders Pty Ltd left debts in excess of $18m including more than $11 million to mainly unsecured creditors and suppliers when it entered administration and then liquidation late last year.

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The Australian Securities and Investment Commission has requested an additional report into the issues raised.

The liquidator has revealed he met company director John Murphy and finance controller Elizabeth Murphy in Rockhampton in early December to discuss potential actions the directors may face.

He said the asset position of potential parties to any action would be explored by any Public Examination into the company's demise.

The liquidator has issued statutory demands for payments from six related entities within the JM Kelly Group which if not met would lead to their winding up.

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A further statutory demand would also be issued against GJ Murphy Holdings Pty Ltd.

Auctions of assets were expected to be held this month.

Former head of the JM Kelly Group Geoff Murphy, who was excluded in 2016 for three years from being a person of influence in the construction industry over his role in the failed JM Kelly Project Builders, said there had been no wrongdoing.

Mr Murphy said his son John had called a meeting with the liquidator on December 5 where he said he had encouraged an investigation by ASIC or the QPS or any other public examination and that any investigations would not uncover any improper conduct.

Mr Murphy said the liquidator's priority should be a return to creditors.

And he laid the blame for company's demise and the loss of 230 local job on its removal from certain government tender lists which he said had prevented it from tendering on about $90m of work in Central Queensland.



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