Dec 12, 2017

Bitter pill for business when Kagara hit the wall

Bitter pill for business when Kagara hit the wall Stuart McIver from Charters Towers based Rubber City

Charters Towers business people would welcome the break given to construction industry suppliers, which holds project owners accountable for their bills.
But they are sceptical about how it would be enforced.
Among other provisions in the Building Industry Fairness (Security of Payment) Bill 2017, builders are obliged to quarantine payments to sub-contractors and suppliers.
Rubber City proprietor Stuart McIver was one of 80 creditors owed more than $85 million when West Australian-owned miner Kagara was liquidated in 2014.
Kagara was in the process of delivering projects in north Queensland spread across 400km, including operations at Mount Garnet, Chillagoe and Thalanga, when hit by falling copper, nickel and zinc prices.
Mr McIver was left out of pocket more than $108,000 for bus services and tyres.
He was eventually paid $2865.86 by the liquidator.
He said he would welcome provisions for miners to be accountable for their debts.
“Looking back on it, my experience is it is a waste of time taking them to task,” Mr McIver said. “Their debts were so big there was not sufficient money there to cover anything.
“There were a lot here that lost an awful lot of money.”
He believed company directors were not careful enough with subcontractors’ or suppliers’ funds.
While the Building Industry Fairness (Security of Payment) legislation had merit, Mr McIver said he feared self-interest would undermine the spirit of the Act.
“I can’t see it working because they run on all of us fools’ money,” he said.
“I don’t think they’d do it because there are other people that would come along who would work without a guarantee. What are you going to do?”
Rubber City was stung in an earlier collapse, on that occasion by another miner developing the Twin Hills gold lease.
“I was only down $18,000. The CBA closed it down but the liquidator got stuck into it and I got all money within 12 months,” Mr McIver said.

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