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There are calls for an investigation in to WA’s Building Commission after it emerged it had failed to detect that Perth construction company BuiltonCorp was in financial trouble when it audited the group only weeks before it went bust.

Building Commissioner Peter Gow has confirmed the body audited Builton in November last year.

Work stopped on more than 100 home building sites around Perth when the company went into administration a fortnight ago, reportedly owing $33 million and leaving 38 staff unemployed and about 350 unsecured creditors.

"We had a look at them in November last year ... there was no indications they were in financial difficulty," Mr Gow told ABC radio.

"This has come as a bit of a rush for everyone."

Many creditors that attended a meeting last week are angry nothing was noticed and the commission has admitted it did not do a "comprehensive examination of the company's financial situation".

One of those, Anstey Cabinets owner Dennis te Wierik is owed about $1 million, has had to cut staff and his company is vulnerable. He said the commission should have greater power to take enforcement action including penalties against companies.

Labor's commerce and small business spokeswoman Kate Doust said she had been fielding complaints and trying to help frustrated subcontractors and home buyers/builders for years who had been unable to get the help they wanted from the Building Commission.

There had been repeated examples of WA building companies collapsing over the years, leaving subcontractors millions of dollars out of pocket and people with homes unbuilt, that the commission had not picked up on, she said.

Ms Doust said it was incredible that Mr Gow had said during a radio interview that social media and the press were key sources of information for the commission when trying to monitor the industry.

"I would have thought forensic accounting and auditing processes would be in place and they would be actually speaking to people in the industry," she said.

"Given the experiences we've had and the number of people coming to us, there does need to be a good look at how the commission functions and its structure.

"We need to have a look at the legislation and give it more teeth."

The commission's compliance director Sandy Randall defended its role, saying the body monitored the data bases of credit rating agencies in "real time, minute by minute".

"When a company falls in to cashflow problems it invariably happens very quickly," she said.

 
  • WA government departments are synonymous with apathy and avoidance of their obligatory duties to the public. The whole Department of Commerce is a sick joke, wich the Building Commission falls under.
    As the Barnett Government is slated to fall in March, it is very doubtful that there will be any appetite in the incoming Labor mob to investigate and more importantly fix any Building Commission problems. Peter Gow knows this, and is no doubt unperturbed in his high castle.

    • Well lets all hope that Barnett gets back in for more of the same then Hey, or lets hope that some of our so called members of Parliament actually do the right thing and start to protect the majority of the population instead of looking after themselves

  • Surely the Home Indemnity Insurer should be held to account for sloppy underwriting practices? Underwriting for potential insolvency isn't that difficult if you are paying attention to the relevant financial benchmark indicators. It would be interesting to know if this is another QBE underwritten builder. Any builder over $10M in turnover is meant to be assessed quarterly and strict control measures applied if failing prudential benchmarks.

  • If they only looked at them in November 2016 and they were OK then the auditor needs checking or it would appear they have used insolvency to defraud – it is called an illegal Phoenix – they can't lose that much that quick

  • Without questioning the intentions or integrity of the Commission, one must acknowledge that this is certainly not a great look for them.

    What is needed is a full exploration about what went wrong, why financial difficulties were not picked up with audits, and how improvements need to be made going forward.

Dulux Exsulite Construction – 300 x 250 (expire Dec 31 2017)
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