Company switch left trail of debt

IN 2016, the Queensland Government transferred a series of construction contracts it had with one failed Rockhampton builder to another within the same group of companies only for it to also collapse two years later.

The liquidator for the second of the two companies subsequently found it had become insolvent within six months of the transfers taking place.

While the various projects were completed, the transfers failed to ensure the failed company’s creditors would be paid.

The liquidators of the other company found it had traded insolvent for three years before it was wound up up in 2016.

The companies left debts totalling $14 million to hundreds of mainly small business construction subcontractors from Townsville to the Gold Coast. Total debt topped $50 million.

The construction arms of the JM Kelly Group of Companies based at the same Rockhampton address were JM Kelly Project Builders and JM Kelly Builders.

They were operated via a central treasury function and funded by National Australia Bank finance through cross loans for which ultimately all 10 companies in the group were responsible.

Geoff Murphy, who had run the JM Kelly Group for 57 years, was excluded for three years by the Queensland Building and Construction Commission from being a person of influence in the building industry following the $31 million collapse of Project Builders in 2016, ahead of the group of companies’ ultimate demise in October last year.