One of the biggest building industry lobby groups in South Australia has hit out at reports that the Australian Securities and Investment Commission (ASIC) will not investigate one of the state’s biggest construction company collapses despite allegations that the company may have been trading whilst insolvent.
Following advice from liquidators Clifton Hill that the Australian Securities and Investments Commission would not be investigating the June collapse of Tagara Builders, the Master Builders Association of South Australia has expressed outrage and called for an investigation to occur.
MBA chief executive officer Ian Markos said many of the businesses which were hurt because of the collapse were mum and dad businesses, and that an investigation was necessary to maintain the confidence of suppliers and subcontractors in one of the nation’s biggest employing industries.
“We are surprised that ASIC would choose not to look further into this matter,” Markos said in a statement.
According to an ABC report, liquidators Clifton Hall say they notified ASIC that Tagara may have been trading whilst insolvent but the watchdog had indicated that it did not intend to pursue the matter further.
An ASIC spokesperson said the regulator does not comment upon investigations (or whether they are, in fact, investigating an entity) or whether or not they have received a report from a liquidator or on their assessment of those reports.
Master Builders is not alone in its frustration.
Trudy Marshall, who together with husband Craig run a Wingfield-based roofing company known as Alien Roofing Contractors says she was ‘flabbergasted’ to be told at a creditors meeting that ASIC had determined that the case was in fact not big enough to investigate, according to The Advertiser.
The Marshalls lost $230,000 in the collapse of Tagara and had to cut half their workforce and plunder their savings in order to maintain their business.
“What is considered big enough?” she said. “A $25m or $30m debt, or whatever it will work out to be, is a lot of money, a lot of businesses, a lot of families have been devastated by this.
“We are all mums and dads, who have put a lot on the line to run our business.”
Markos says Tagara represents one of the biggest corporate collapses in South Australia and was specifically referenced by the Senate Committee into Construction Industry Insolvency.
He said the industry needs to see action in order to provide confidence that the law is in fact going to be enforced.
“The building industry is filled with large companies – but it is also filled by a growing number of smaller businesses operating in the commercial sphere,” he said.
“The subcontractors affected by this collapse are the ones most in need of answers and need faith in the system itself.”