Builder calls halt owing up to $ 20m

Firm with unfinished homes in Hamilton and Auckland closes operations leaving contractors in the dark

by Natalie Akoorie and Anne Gibson The future of a residential building company with unfinished houses in Hamilton and Auckland was unclear last night, with creditors owed millions of dollars.

Starplus Homes, a building company based in Hamilton and South Auckland, ceased trading this week and could owe as much as $ 20 million, insiders say.

The Weekend Herald understands staff were told over the weekend not to come back to work and signage from up to 12 partially built homes in Hamilton were taken down leaving homeowners in the lurch.

It’s believed Starplus has another 60 projects half completed in South Auckland, including at subdivisions in Takanini and Papakura.

The largest creditor, Mitre 10 Mega Hamilton, could be owed as much as $ 5 million. Owner Terry Wilson would not confirm an amount but said Starplus was a significant customer.

Wilson said it was too early to speculate whether the company would be put into receivership or liquidated but he was working on putting together a scheme of arrangement to finish the houses.

The Starplus Homes website hosts a link on Trade Me to 27 houses for sale or to be built, mostly in South Auckland, with a combined value of more than $ 13 million.

An industry insider said at least $ 5.5 million was owed to primary creditors, with more to secondary creditors including one tradesman who was owed $ 130,000 for subcontracting work.

Starplus Homes was known for building houses at cut- rate prices of up to 15 per cent cheaper than other building companies.

A subcontractor who is owed about $ 12,000 for materials on housing sites at Addison in South Auckland said the Auckland Starplus office at 42 Ormiston Road, East Tamaki had shut and he could not contact people about an outstanding bill.

Nigel Richards, Auckland- based McConnell Property general manager, said he also knew of outstanding bills and people who wanted to be paid for their work.

A subcontractor owed money told the Weekend Herald people were particularly worried after Mainzeal Property & Construction suddenly went under on Waitangi Day and that Starplus was active in the South Auckland area on many different sites.

‘‘ I rate my chances of winning Lotto ahead of getting paid,’’ he said.

Owner Richard Zongyan Lee was one of several Hamilton building company owners who came under fire in early 2011 after complaints of shoddy workmanship surfaced I think it’s probably fair to say it’s a company that’s pretty asset rich and cash poor. around using Chinese immigrant builders.

But Wilson said Lee was an ‘‘ honourable man’’ who was doing everything he could to make sure creditors get paid.

Wilson planned to meet with other creditors to work out how to mitigate the loss and ‘‘ get the best outcome for everyone’’.

He believed the company, which had one of the highest residential home building rates in the Waikato, had grown too big too fast.

‘‘ I think it’s probably fair to say it’s a company that’s pretty asset rich and cash poor.’’

Starplus Homes began building houses in Cambridge in 2007, constructing 36 in the Waikato in 2010.

Another insider said at one stage recently the company had 100 building projects in progress.

Hamilton City Council confirmed it knew of the situation but had not received official notification.

Lee and several of his staff did not return messages left by the Weekend Herald. His lawyer Geoff Hanlon would not comment.