SUBBIES LOSE $33M
BURNT subbies will get less than a quarter of the $41 million they are owed by a multi-national venture that collapsed late last year.
Some creditors met yesterday to determine the fallout from the collapse of CRCG-Rimfire, a joint venture between Chinese Government-owned China Railway Construction Group and Brisbane builder Rimfire. They will share less than $8 million between them.
Senator Murray Watt has called for an investigation into the 32 collapsed construction companies.
CREDITORS owed up to $41 million by the spectacular collapse of a Queensland construction company will share less than $8 million between them after the liquidator used his casting vote to accept a deed of company arrangement from the failed firm.
CRCG-Rimfire, a joint venture between Chinese Government-owned China Railway Construction Group and Brisbane builder Rimfire, collapsed in November with debts to developers, subcontractors and others.
Bricklayer Mick Jefferies claims he’s owed about $140,000 for work he completed for Rimfire on the five-storey The Park apartment building on Markeri St, Mermaid Beach.
The deal means his bestcase scenario, if his claim is recognised, is receiving $56,000 once administration fees are paid, well short of what he paid his suppliers and staff.
“It has greatly impacted me,” he said. “I had other projects I was going to do that I can’t do anymore.
“You have to change your whole lifestyle. People are losing their homes over this.”
In 2016, the QBCC granted CRCG a licence to complete $18 billion of work every year – one of the biggest licences ever granted in Queensland – subject to a $1.01 billion covenant to guarantee creditors would not be left out of pocket in the event of a liquidation.
Creditors yesterday endured a three-and-a-half-hour meeting, which first resulted in a flawed vote count of 23-22 in favour of the deed of company arrangement proposed by the failed group.
A recount saw the result drawn at 23-23, leaving liquidator Michael McCann, of insolvency firm Grant Thornton, to use his casting vote, which he made in favour of the company arrangement.
Those voting against, including more than a dozen subcontractors owed $6 million between them, were pushing for a liquidation, which would have resulted in court action in China to pursue full payback under the $1.01 billion covenant.
Mr Jefferies joined fellow subcontractors, home buyers and other creditors of failed building companies including Future Urban Residential and Queensland One Homes at a meeting in Southport yesterday.
Senator Murray Watt called the meeting to back a push from subbies groups to have 32 collapsed construction companies referred to the Australian Federal Police to investigate the matter.
In Senate Estimates last week, Mr Watt grilled ASIC Commissioner John Price on what the regulator had done to investigate.
“In the Gold Coast Bulletin there is a story about yet another building company collapse on the Gold Coast,” he said.
“It’s a company called Future Urban Residential. Has ASIC had any involvement with or done any investigations into this company previously? The people behind it seem to also be connected to another company which went into liquidation last year called Queensland One Homes.”
The commissioner said he’d like more information on the case.
Mr Watt asked ASIC to specifically determine whether there was a need for specific preventive action or greater enforcement on the Gold Coast as an apparent hotspot for construction company collapses.
Les Williams, founder of the Subcontractors Alliance, said inaction by ASIC and the QBCC had enabled repeated collapses to happen.
“We want the Serious Financial Crime Taskforce of the Australian Federal Police to investigate some of these collapses,” he said.
Directors of Queensland One Homes and Cullen Group are set to front the Supreme Court for public hearings later this year.