BUSINESS Punishment ‘ slap on wrist’

REGULATORS are being urged to get tougher with builders who do the wrong thing after the director of a failed construction group which caused massive fallout in Queensland was disqualified from managing companies for four years.

Corporate regulator the Australian Securities and Investments Commission has announced the disqualification of Craig Walton for four years until June 26, 2022. Mr Walton led Walton Construction Pty Ltd and Walton Construction ( QLD) Pty Ltd which left $ 78 million in debts to creditors on building projects in 2013, including in Townsville.

In a statement, ASIC said it found Mr Walton had:

Improperly used his corporate position to gain an advantage for himself;

Failed to prevent the companies from trading while potentially insolvent; Failed to pay taxes; and Failed to exercise his duties as a director with due care and diligence.

In making its decision, the regulator said it relied on supplementary reports lodged by liquidators of the companies, Grant Thornton Australia.

ASIC assisted the liquidators to prepare the supplementary reports by providing funding from its Assetless Administration Fund.

It also successfully applied to the Federal Court to replace former liquidators to Walton, PKF Lawler, after concerns about a referral relationship between them and corporate advisers the Mawson Group which also had a relationship with the Walton companies.

One of the Townsville subcontractors hit by the collapse, Kylie McIlroy, said the disqualification was “probably a little bit too late” and appeared to be little more than a “slap on the wrist”.

“Regulatory bodies have got to start sending stronger messages that this behaviour is not OK. It destroys businesses. It destroys marriages,” she said.

The collapse was among several construction industry failures which led to reforms by the Queensland Government that are still being implemented.

One of the reforms, the introduction of project bank accounts, applies to government projects between $ 1 million and $ 10 million.