Great news for the victims of the Cullen Group Liquidation and other failures of the past. If this investigation is done thoroughly, these crooks will think twice before submitting false documents to the QBCC.
Sensational work by Subcontractors Alliance founder Les Williams. Subcontractors thoughout Queensland should thank him for his never give up attitude and dogged determination to bring these builders to task.
This story is from The Sunshine Coast Daily
POLICE have been asked to investigate serious allegations of fraud relating to the collapse of a Queensland building company as Housing Minister Mick de Brenni launches a forensic examination of recent construction industry company collapses.
The probes have been called as evidence emerges the state government regulator was informed months before the Cullen Group Australia collapsed of serious concerns about its financial performance.
The complaint was made on March 19, just a month after Cullen Group passed the Queensland Building and Construction Commission's Minimum Financial Requirements to retain its licence.
The informant received an emailed reply on March 24 from the Principal Financial Investigator in the QBCC's Financial Investigations unit, who acknowledged there was concern about Cullen Group's situation and that an investigation was under way.
The allegations included reference to an impending financial audit triggered by the QBCC.
"I have spoken to various sources and have a multitude of information that can prove that they have been insolvent for some time,” the informant wrote.
He was not approached for the substantiation he could provide including evidence that statutory declarations had been signed saying subcontractors had been paid when they had not.
Issuing a false document carries a penalty of up to two years imprisonment.
The QBCC did not act against Cullen Group Australia until December, 2016, by which point its debts totalled more than $18 million.
There has been no response to attempts by the Sunshine Coast Daily to secure a response from the company.
"I am deeply concerned about reports that the QBCC were alerted to the Cullen Group's financial situation in early 2016,” Mr de Brenni said.
"Earlier this month I asked the QBC Board to investigate whether the QBCC could have taken earlier action in relation to the financial circumstances of the Cullen Group, and whether complaints ought to have been investigated.
"This horrendous case, which has seen subbies and suppliers left carrying the can for millions of dollars of work that has already been completed, highlights to me serious deficiencies in the Minimum Financial Requirements policy adopted by the previous board.”
Small business subcontractors in Queensland have suffered more than $300 million in losses since the October 2013 demise of Walton Construction.
Walton left debts of $80 million including $30 million in Queensland. It became of key interest to the 2015 Senate Inquiry into Construction Industry Insolvency which, as the Queensland Government is now doing, recommended the introduction of project bank accounts.
Mr de Brenni said he had asked the Commissioner of the QBCC to appoint an external financial investigator to undertake "an independent audit of how financial requirements policies have been applied in cases of major builder liquidations dating back to the Walton collapse of 2013”.
"I've asked that the audit also assesses whether false information was declared to the QBCC, an offence that can carry a penalty of up to two years under the QBCC Act,” he said.
"I am aware of general allegations regarding false declarations allegedly made in the Cullen matter and have requested the Queensland Police Service investigate these allegations.”
The probes come as the Crime and Corruption Commission investigates a complaint about the transfer by Queensland Rail in late September, 2013, of eight contracts worth $20million held by Walton Queensland to its alleged phoenix company Peloton on the strength of a phone call three days before the builder went broke.
A 2014 internal investigation by Queensland Rail found only that the government body had at all times "acted in good faith”.
Following questions by the Sunshine Coast Daily the matter was referred last November by Transport Minister Stirling Hinchliffe to the Office of the Queensland Integrity Commission.
Commissioner Richard Bingham heard evidence from Subcontractors Alliance head, Coolum civil engineer Les Williams, and industry whistleblowers subsequently finding a prima facie case existed for prosecution.
"No doubt it will have regard to the strength of any evidence which Mr Williams is able to provide, but in my view the submission which he has provided to you outlines credible prima facie evidence in this context,” Mr Bingham wrote in a letter to Nicklin independent and Speaker of Parliament Peter Wellington.
"Having considered Mr Williams' submission, I believe that the concerns which he raises in relation to QR's role in the transfer of the Cleveland railway station contract warrant investigation.
"It is conceivable that there are other matters relating to other contracts to which Walton was a party which may also warrant examination by relevant authorities, but I have not considered those.”
The Subcontractors Alliance's push for greater security of payment for building sector small businesses has been bolstered by reforms announced by Mr de Brenni including the introduction of project bank accounts to quarantine money paid by clients to principal contractors to ensure they get paid.
Subbies have long complained the current system, which requires contractors to provide clients with statutory declarations that subcontractors had been paid before progress payments are released, was being rorted without fear of penalty.
"I applaud the Minister's resolve to investigate any wrongdoing regarding possible fraudulent financial reporting by construction companies going back to the collapse of Walton Constructions,” Mr Williams said.
"In my opinion the responsibility for the huge non-payment issues for small business in the Queensland construction industry can be attributed to the 2014 amendments to the Building and Construction Industry Payments Act by the previous state government accompanied by the 2014 amended financial reporting policy that appears to be abused at a huge cost to construction industry small business.
"We would really like to know what precipitated that LNP Government policy change after the financial disaster caused by the Walton collapse in late 2013.
"After decades of small businesses being subjected to payment atrocities by construction companies, finally a government and the new CEO of the QBCC has the resolve to tackle the problem front on.
"Queensland will be far better for it.”