Probe on collapsed builder
The administrators of failed construction company Australia's Residential Builder have warned that "substantive investigations" will be needed to determine responsibility for its collapse, which has so far cost creditors more than $7.2 million.
The wind-up of the Port Melbourne-based firm - approved by creditors earlier this month - comes as administrator Hamilton Murphy cancelled building contracts for 70 homes, leaving buyers scrambling to find replacement builders.
Michael Caspaney of Hamilton Murphy declined to comment on any potential investigation when contacted by BusinessDay.
But the minutes of a creditors' meeting filed with the corporate regulator show preliminary inquiries had "identified potential offences" that could be investigated by liquidators.
The Tax Office has also flagged concerns about transactions made to "the Partners IP account".
Questions have also been raised about the circumstances under which one of the directors, Robert Wiederstein, resigned before the company's collapse in early August, according to documents filed with the Australian Securities and Investments Commission.
Co-director Graeme Varcoe, who also became secretary with Mr Wiederstein's departure, has previously told creditors about confusion surrounding the resignation and ARB's financial affairs when he returned from annual leave in mid-June this year.
"One of [Mr Varcoe's concerns] was whether his co-director had resigned, to which he was advised that he hadn't. Further inquiries made by him later disclosed that [Mr Wiederstein] had in fact resigned and that he had backdated his resignation to 31 May 2013," creditors' meeting minutes said.
"Following the former director's departure from the company it was at this time that [Mr Varcoe] realised that the company had major cash flow issues, with a substantial amount of money being payable to the company from clients in respect of progress payments."
Jack Hossain's new home in the western suburb of Maddingley had reached the framing stage when ARB collapsed in early August. By that time, Mr Hossain had only $15,000 outstanding on the $188,000 contract price, handing over his latest progress payment about a fortnight before the builder went into administration.
"They never said anything was wrong or that the company was in trouble. Then all the work stopped," he said. "I've been quoted $67,000 to finish the work."
Mr Varcoe and Mr Wiederstein could not be reached for comment.