Call for Walton collapse hearing to subpoena NAB
A KEY figure in a Senate inquiry into construction industry insolvency says the NAB must be subpoenaed to give evidence at a court hearing to be held into the 2013 Walton Construction collapse which involved losses of more than $70 million.
About 600 subcontractors in Queensland lost more than $30million when Walton went into receivership on October 3, 2013, including Sunshine Coast subbies who lost $2.9million relating to work they did on the Nambour Coles project.
The next day, a phoenix company, first called Peloton Builders and later Tantallon, began operating from Walton's Brisbane headquarters, leased from Altum, a fundraising arm of the LNP.
Ahead of Walton ceasing business, Peloton, an entity created by Walton business advisers the Mawson Group, who had been recommended to it by NAB, took over key Walton projects through an Asset Sale Agreement.
Senator Doug Cameron, who has been part of the Senate inquiry which has conducted hearings in the ACT, Brisbane, Sydney, Melbourne and Adelaide, said the collapse of Walton Constructions appeared to have involved some very questionable business practices.
"Sunlight is the best disinfectant and Walton Constructions' creditors and the public at large are entitled to complete transparency about the role played by the National Australia Bank in the Walton collapse," he said
"The public examination is being funded by taxpayers and it is in the public interest that NAB should be required to answer questions about its role.
"Insolvency in the construction industry is rife and has serious economic and social consequences. The questionable business practices surrounding many construction industry collapses is threatening the long-run viability of the industry and the many thousands of small businesses and their employees who make their livelihoods in the industry. It is completely unacceptable that the top end of town should be immune from answering serious questions about their role in these collapses."
The Senate inquiry will meet in Canberra ahead of it handing down a final report in December.
IN A statement to the ABC this year, the bank said: "NAB did not suggest, propose, support or encourage either the proposed or actual transfer of assets to Peloton. NAB declined to provide its consent to the transfer of any assets to Peloton. NAB later discovered that the actual transaction that was entered into was different to the transaction that was presented to NAB (which we declined)."
However, when Walton went into receivership the bank failed to seize 18 vehicles valued at more than $550,000 which it had financed via a lease arrangement. Instead, they were used by Peloton and another Walton phoenix, Lewton, until both went into receivership in 2014.
"As we have repeatedly said, NAB has acted in good faith at all times under the belief that all parties were working to keep Walton operating so the company's 120 employees could keep their jobs and the company could service their customers," a bank spokesman said last week.
"The motor vehicles were financed to Walton Construction Pty Ltd. NAB was asked to continue the financing, but in the name of another party, but declined.
"NAB allowed time for the finance agreements to be paid out.
"It is common to allow some time for repayment before repossession.
"When repayment did not occur within a satisfactory time, the assets were repossessed and sold by public auction."
Documents obtained by the Sunshine Coast Daily show that on January 14, 2014, more than three months after the Walton collapse, Mawson executive Phil Spry sent emails to colleagues inquiring about alternative arrangements if NAB sought to retrieve vehicles and office equipment that had transferred from Walton to Peloton.
The NAB eventually appointed a receiver to the phoenix company on February 26, 2014, four-and-a-half months after Walton closed its doors.
Subcontractors want full transparency around the way NAB retrieved securities it had with Walton, when those payments were made and by whom.
A PUBLIC examination in the Federal Court of Victoria beginning on November 30 is being funded by the Queensland Government and the Australian Securities and Investment Commission.
The Subcontractors' Alliance, a group established after the Walton collapse to seek improved security of payment legislation, was given a commitment by the Queensland Government that the NAB would be subpoenaed along with the initial Walton liquidator, Glen Franklin of Lawler, Draper, Dillon.
Neither is on the witness list for the week-long hearing.
A spokesman for the NAB said the bank had contacted the Walton Construction liquidator in March.
"We offered to provide copies of documents, correspondence and file notes and to answer any questions they had," he said.
"We believe we have voluntarily provided all the information they sought and answered all of their questions but will appear and provide any further help if we are asked to attend."
Asked by the Daily last week whether it had an expectation NAB would be subpoenaed to the public inquiry, a spokesman for ASIC said the regulator "did not have any further comment on this issue at this time".
However, senior ASIC executives questioned at the Sydney Senate inquiry hearing made clear there was an expectation NAB would be examined under court conditions at the public inquiry.
"We are aware of the fact that NAB took security. I think it was in or around May 2013," ASIC senior executive and leader of insolvency practitioners Adrian Brown told the hearing.
"We expect that the liquidators, as part of their public examinations, will very much look at those transactions and interrogate NAB about them."
Asked by Senator Cameron whether he was aware of NAB's role in the pre-liquidation restructure of Walton, ASIC Commissioner John Price said "there are some court sanctioned questions that are going to be asked of various people shortly. I would prefer not to get into that level of detail, if that is all right".