The pandemic, problems getting building contractors, rising construction costs and a financier taking $2 million profits on a loan default were blamed for the insolvency of an Auckland developer which owes Inland Revenue $1.5m.
OD 2019, previously called Oaks Development, was put into liquidation last month at the behest of its sole shareholder, owing unsecured creditors an estimated $2.2m after building new Manurewa apartments.
Botany-based liquidator Grant Reynolds of Reynolds and Associates cited that string of problems as reasons for the failure.
Inland Revenue is listed as a preferential creditor, owed $1.5m for GST and PAYE tax.
Veer Vijay Singh of Flat Bush was the company’s director up until December 7 but Warren Edward Brown of Highland Park is now its sole shareholder and director.
Creditors said the company built the 25-unit 25-car park Parklane Terraces at 145-147 Russell Rd, Manurewa.
The three-level buildings each had about nine apartments. The project had been finished and people are living there, one said.
“Quite honestly, some of this stinks,” said the creditor who said he was increasingly being left unpaid for his work in the building sector in Auckland. “The whole project was an utter stuff-up. They selected a company that had never built like that before, that was not suitable to do it.”
Another creditor said: “I’m also glad that you asked about this because we are a very small company where we as owner/operators/contractors do the majority of the work. So this affects us on a personal level. It is difficult having to deal with not being paid for all the hours and days. We put money in out of our pockets to cover for all the costs of the job.”
A portion of the total amount was owed to his subcontractors and he was having to deal with that, he complained.
Reynolds listed many issues for insolvency.
“This company was in the business of developing sites and building and onselling properties. The former director, Mr Singh, explains the following contributed to the insolvent position of the company: the main builder contractor was placed into liquidation, delays occurred while trying to recruit new building contractors, the effect of Covid-19 and increased costs.”
But a project financier enforced the default interest conditions of the finance
agreement and took total proceeds from a sale of a completed development.
“The estimated profit of circa $2m was lost as a result,” Reynolds wrote.
Secured creditors are Trident Capital Management, Chester’s Plumbing and Bathroom Centre, Coffee Suppliers and Ng Guat Leng.
Singh is a director of Oaks Living companies. Social media for that business shows apartments developed on Kenderdine Rd, Papatoetoe, Manukau. LinkedIn has Singh as managing director and owner of Oaks Property Management and Oaks Living.
Two- and three-bedroom places at the Papatoetoe project are advertised as selling for $565,000 and $650,000.
“At Oaks Living, we create homes that are affordable and enrich those that live in them. Our projects respect the environment and different cultures while responding to the places where they are built,” that company says.
Oaks Property Management claims to be “the fastest growing property management business in New Zealand specialising in residential property management and development”, that business says on Singh’s LinkedIn profile.
“We manage more than 700 properties in Auckland and are expanding in Hamilton and other parts of North Island. We are the only residential property management company in New Zealand accredited with ISO 9001 Quality Service standard,” it says.
Reynolds said it was too early to say if the liquidated company would be able to pay any of its debts.
He issued a long list of OD 2019’s creditors which includes arms of the state and Singh’s Oaks Property Management.
Many businesses involved in supplying services and construction materials were listed including Concrete Protection, Dragon Contractors, Groundworks Building & Civil Contracting, Freeco Flooring, Healthy Homes New Zealand, Onehunga Carpets & Rugs, PK Plastering & Interiors and consultants Norman Disney & Young.
NZX listed Steel & Tube, national business Waste Management and Auckland Council-owned Watercare are also claiming money from OD 2019.
Assets available for unsecured preferential creditors total $10,000, according to a statement of affairs. Creditors are asked to fill in a form with details of their claims against the company.
Singh, a sponsor of the Indian Business Awards in 2019, did not respond to inquiries to discuss the company’s insolvency.
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