From The Guardian
Documents show Probuild’s WBHO Infrastructure borrowed $48.7m from other parts of the group last year as it struggled to survive
Administrators of the collapsed Probuild building empire say they will investigate a transaction last year in which almost $50m was transferred from other parts of the business to the group’s struggling civil construction division.
Company documents show Probuild’s civil construction company, WBHO Infrastructure, borrowed $48.7m from other parts of the group last year as it struggled to survive massive losses caused by one of its key projects, the western roads upgrade in Melbourne.
The loan included $29.2m from Probuild’s building arm, Probuild Constructions (Aust), sparking industry fears money that could have been used to pay subcontractors was instead used to prop up the infrastructure arm of the business, and leading to renewed calls from the construction union for reforms protecting payments to subbies.
An additional $19.5m came from the head company of the Australian Probuild group, WBHO Australia.
Industry sources say that only about $5m of the loan has been repaid.
Through a spokesperson, Probuild’s administrators, Deloitte partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr, said they could not comment on the group’s finances because they were focused on “stabilising the businesses and securing sales to maximise the outcome for employees and all creditors”.
“But yes the issue will be examined,” the spokesperson said.
On Monday, the administrators said they had reached an “in principle agreement” to sell most of Probuild’s Victorian assets to NSW company Roberts Co, resumed work on a hotel project in East Melbourne and handed the Westside Place Ritz Carlton project in Melbourne’s CBD back to its developer, Far East Consortium.
Probuild’s directors called in the administrators a fortnight ago after the group’s owner, South Africa’s WBHO, decided to stop financially supporting it, despite previously providing a letter to the Australian companies promising support until the end of June.
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