A Melbourne building company has collapsed owing $2.3million, leaving customers hundreds of thousands of dollars out of pocket.
Area Projects Pty Ltd folded last year with the appointed liquidator, John Morgan, finding the company’s only bank account was overdrawn by $20.
Questions remain over a total $2.5million transferred out of the business before it went bust.
The company specialised in new homes, townhouses and renovations.
As Mr Morgan pored through financial records, he discovered that the director, Brett Mcgauchie, and the company ‘regularly transferred funds to each other,’ according to a report seen by news.com.au.
He found a ‘pattern’ where customer deposits were immediately transferred out of the business, to accounts ‘presumably under the control’ of Mr Mcgauchie.
The transfers continued for 18 months prior to the company’s collapse and totalled $2.5million.
But Mr Morgan added he had ‘not yet established’ whether the transfers were made for the director’s benefit.
Area Projects Pty Ltd collapsed last year with the appointed liquidator, John Morgan, finding the company’s only bank account was overdrawn by $20
The director of Area Projects, Brett Mcgauchie, and the company ‘regularly transferred funds to each other’
He also noted that Mr Mcgauchie may have transferred a property in the exclusive suburb of Camberwell, Melbourne, to someone else before the company went under.
He believed the company was trading insolvent for at least three-and-a-half years.
One customer said ‘Mr Mcgauchie had ‘walked away into the sunset’ and left them hundreds of thousands of dollars out of pocket.
Reviews of the company online also showed customers had been left in the lurch.
‘Worst experience in my life,’ one said.
‘Area Projects did a renovation for our kitchen and it was a complete disaster. Cheap materials, everything is falling apart.’
‘They only completed 20 per cent of the renovation of our house. Our house looks like a warzone,’ said another.
‘We engaged Area Projects to do some renovations,’ said a third.
‘Not only did they do a terrible job, but they also refused to finish the job.’
Of the $2.3million the company owes, the Australian Taxation Office is the biggest creditor, owed $715,609.
