Director grilled over $33m JM Kelly collapse
A KEY figure in the $33 million collapse of JM Kelly Group remained a director of several companies following the failure of the Rockhampton-based builder, a court has heard.
Geoffrey John Murphy was a director of several companies within the group, before resigning in June 2016 following the collapse of the companies.
But Mr Murphy, who is today appearing in a Federal Court examination into the collapse, said he remained a director of a company developing a parcel of residential land in Rockhampton and JM Kelly Pastoral which owned several properties in central Queensland.
Mr Murphy, 78, said that since resigning from the building business in the middle of 2016 he had had a full-time involvement in the pastoral business and was not aware of what had occurred within the group since then.
"I am going on 80 and some of these things I can't recall," he told the court.
Counsel for JM Kelly's liquidators questioned Mr Murphy, who is now a bankrupt, on why one of the companies within the JM Kelly group had been set up to take money owed to other companies within the group and not pass it on.
These funds appeared as a loan to those companies in the books with one company in the group JM Kelly Project Builders owed $6 million.
Mr Murphy said the arrangement was standard business practice.
"It is what government does and what you do if you have a multitude of companies," he said. "It was recommended by PWC."
The court heard that JM Kelly Project Builders' financial situation deteriorated when it became involved in a costly legal battle over a development on the Gold Coast.
"The project was for $50 million but we got paid less than the 50 million," Mr Murphy said.
"There were changes which we never got paid for so we sued for $30 million plus costs."
However, the company had adverse cost orders of $3 million made against it in favour of the developer following which Mr Murphy had to consider putting the company into administration.
The examination continues.