PwC's Business Recovery Services team partner Derrick Vickers has been appointed as the liquidator of the JM Kelly Group.
PwC's Business Recovery Services team partner Derrick Vickers has been appointed as the liquidator of the JM Kelly Group. Nev Madsen

JM Kelly Group: Superannuation allegedly unpaid for a year

THE push is on for a public inquiry after fresh allegations were aired during a JM Kelly Group's creditor meeting yesterday.

Voluntary administrator PricewaterhouseCoopers said they were considering forming a task force to investigate a number of issues including the alleged signing of false statutory declarations in the lead-up to the collapse of the group.

Former JM Kelly Group director Murphy has rejected these allegations.

Although reporters were refused entry to the Leichardt Hotel meeting, a confidential source among the estimated 50 attendees was able to provide details to The Morning Bulletin about what transpired behind closed doors.

During the almost three-hour meeting, the source described the audience as vocal, frustrated and impatient as votes were taken confirming that the group would be wound up.

PwC was appointed the liquidator responsible for the recovery of money.

PwC's Business Recovery Services team partner Derrick Vickers estimated that JM Kelly Group had been trading insolvent since January 2017, but that date could move.

He alleged that 78 statutory declarations signed in the lead-up to the collapse suggested that creditors and employee entitlements had been paid, which didn't match up with its proof of debt.

"We can say with relative confidence that superannuation has been outstanding for a good proportion of employees for over 12 months," Mr Vickers said.

"We've actually filed a report and made an official complaint to the Queensland Police Service against those that have signed the statutory declarations, predominantly the director.

"We've provided them with the documentation to support our assertions, it's now a police investigation, and we've also notified the ATO of the unpaid superannuation."

According to Mr Vickers, police are looking at the allegations with "quite a bit of seriousness" and it had gone up to "ministerial level".

QPS contacted The Morning Bulletin late yesterday to say they had investigated the fraud allegations and other matters and had determined that there was insufficient evidence to initiate criminal proceedings.

"The matter was referred to the Australian Securities and Investments Commission for its consideration under Commonwealth legislation," a police spokesman said.

"The QPS takes all allegations of fraud seriously and where sufficient evidence exists will prosecute offenders accordingly."

Murphy rejects claims of wrong-doing by JMK directors

Mr Vickers said he was considering making a complaint to the federal police and envisaged a possible scenario where a multi-agency task force may be formed for an investigation.

Looking at the future prospects for the group, he said the majority of the JMK businesses were no longer able to operate as they were not financially viable including JM Kelly Builders, Metal Accessories and CQ Plumbing.

However, Pink Lily Sands remained profitable and would continue to trade.

During the meeting, creditors gained an insight into PwC's arduous progress of untangling the JM Group's convoluted corporate organisational chart and financial dealings.

Mr Vickers didn't agree with group director John Murphy's reason for the group's demise, which he blamed on the Queensland Civil and Administrative Tribunal's proceedings cancelling the building licences and the preclusion of JM Kelly from tendering for projects.

"The treasury function is opaque in so far as there is a significant number of transactions in company, lots of moving around on loan accounts, quite a bit of money that is moved out of the company that should have been retained by the company for its creditors," he said.

Mr Vickers said he had already issued a number of demands against entities outside the group currently in control of the administrators and liquidators, and there may be others that they were yet to identify.

"There's a number of inter-company transactions or loan accounts we've issued demands against," Mr Vickers said.

"As we unpick the 43,000 inter-company loan accounts over the last 12 months, it's over 100,000 inter-company transactions and the level of indebtedness we've seen has grown quickly."

He said PwC had reservations that the information provided by the JM Kelly Group to the Queensland Building and Construction Commission may not have been accurate and there were a number of other matters they had concerns about.

Mr Vickers alleged there was an almost $3 million term deposit which was reported as security and a number of inter-company loans that were not collectable which should have been excluded.

There were also significant transactions taking place in the days before and after deadline dates to satisfy the QBCC licence.

"I've made an application to the QBCC for them to consider funding the liquidators to undertake a public examination to be transparent, we've calculated that to be about $250,000," he said.

In a letter to The Morning Bulletin last week, former JM Kelly director Geoff Murphy said he understood that John Murphy had some legal implications preventing him from commenting at this point.

He said he understood many subcontractors and suppliers will have suffered losses arising out of the decision to place JM Kelly in administration and for that he was deeply sorry.

"I know that every effort was made to avoid that step but the action against QBCC and the conduct of it and the Department of Housing and Public Works in removing the company from certain tender lists, which prevented it tendering upon almost $90 million of work within Central Queensland, was insurmountable," he said.



Young child's hand caught in travelator at Stockland

premium_icon Young child's hand caught in travelator at Stockland

Many feared the worst as emergency crews rushed to free the boy

Can you guess which CQ landmark reclaimed its original name?

premium_icon Can you guess which CQ landmark reclaimed its original name?

Member for Keppel Brittany Lauga stands with Darumbal people

Ex-cyclone Owen is expected to fade overnight

Ex-cyclone Owen is expected to fade overnight

Ex-tropical cyclone Owen is set to fizzle out Monday morning

Local Partners