JM Kelly figures given to building watchdog in doubt
FINANCIAL figures provided to the building watchdog by the failed JM Kelly Group in order to keep its building licence might not have been accurate, a court has heard.
JM Kelly Builders general manager John Murphy has today told the Federal Court how in the lead up to liquidation the company provided figures to the Queensland Building and Construction Commission to show it has the required assets to keep operating.
But Murphy, who was giving evidence at a public examination by the liquidator into the $50 million collapse of the group last year, said the company had to meet an unreasonable deadline to provide the figures and he could not vouch for their accuracy.
"I can't say if these figures are accurate or inaccurate," Mr Murphy said. "We told the QBCC that the figures might not be robust because of the unreasonable time frame."
The collapse of the Rockhampton-based builder led to the loss of 250 jobs and a number of unfinished projects including the city's Aldi supermarket and the Rockhampton Base Hospital.
Mr Murphy was questioned about why the group took on liabilities of almost $1 million to complete several State Government projects in 2016 following the earlier collapse of a JM Kelly company. He said the group wanted to keep faith with subcontractors who had worked on the projects and not been paid.
Mr Murphy told the court of a "round robin" system of intercompany loans that operated within the group, that involved a "treasury" company taking payments on behalf of other firms in the group and becoming indebted to that company.
Barrister Craig Wilkins, who is appearing for the liquidators, said if all the of debts owing to the various companies were no able to be paid the group would effectively be insolvent.
Mr Murphy said that could potentially be the case but would depend on other assets held by the company.
Mr Wilkins also asked Mr Murphy if he was aware of the QBCC policy requiring building companies, including those making intercompany loans, to have a consistent level of net assets to keep their licence.
Mr Murphy said he was aware of the "general thrust" of the policy but relied on accountants to sign off on the actual figures.
"From June 2016, I had a lot of things I had to deal with and some of these things can easily be forgotten," he said.