JM KELLY SCANDAL: Failed builder's debts top $20m
THE administrator of a central Queensland building company which collapsed owing more than $11m to in excess of 300 unsecured creditors says if its investigations reveal criminal offences police will be called.
JM Kelly Builders also owed more than $1 million in employee entitlements and $9.198 million to secured creditors.
In a report to creditors ahead of a meeting scheduled for Rockhampton next Wednesday PwC, the administrator of JM Kelly Builders, said creditors had been identified as not being paid despite statutory declarations signed by the company stating otherwise.
"If it appears that a criminal offence has been committed based on our investigations, a liquidator, if appointed, will report such offences to the AFP and/or QPS," the report said.
PwC had also noted a number of issues that required investigation in relation to Queensland Building and Construction Commission licence requirements.
The administrator has written to the auditors who signed off on Minimum Financial Requirement reports to the QBCC asking them to deliver all books and records relating to the company and particularly for the MFR reports as at the 2018 Financial Year and December 31, 2016.
Letters of demand for full payment totalling $8.598m have also been sent in relation to money owed the company by GJ Murphy Holdings, JMK Pastoral and Amcorp Pty Ltd ATF, the Murphy Holding Trust.
The report has found that JM Kelly Builders, which owes secured and unsecured creditors around $20 million, has been trading while insolvent since at least January, 2017.
"Directors who allow a company to continue trading when there are reasonable grounds for suspecting that the company is, or may become, insolvent may be held personally liable for debts incurred," PwC stated.
"A number of circumstances from approximately January 2017 may have indicated that the Company was in financial difficulty.
"Our preliminary investigation indicates that the company had difficulty in paying creditors within terms from around January 2017.
"This is evidenced by a number of emails from creditors following up outstanding payments, ceasing supply until payment was made and discussing payment plans.
"As a result of our investigation into potential insolvent trading by the director, we are of the view that there may be claims that a Liquidator could pursue against the director in respect to trading the Company while it was insolvent.
"During FY16 to our appointment, the Company may have been unable to pay its debts as and when they fell due and may therefore have been insolvent.
"Should the Company be wound up at the Second Meeting, future investigations will occur including a public examination.
"A Liquidator will need to investigate all of the matters noted in greater detail and determine precisely when the Company became insolvent."