Administrators from EY have been appointed to various Pindan Group companies from 5pm this afternoon.
Administrators from EY have been appointed to various Pindan Group companies from 5pm this afternoon, as several of its construction sites remained unoccupied today.
Yesterday, Business News revealed that former Pindan Group director Nick Allingame had launched a multi-million dollar lawsuit against the company in a bid to retrieve alleged outstanding bonuses from 2017 and 2018.
The news coincided with confirmation that up to a dozen subcontractors across the company’s construction sites had walked off the job on Friday after being told Pindan could not pay them.
Business News understands several subcontractors met to discuss the news early this morning, but remain tight-lipped about the outcome or any plan to take any action.
The developments come less than two years after Singaporean-owned Oxley Holdings moved to full ownership of Pindan, reporting that the group had annual revenue of about $300 million and 400 staff last year.
But rumours have surfaced that the company may have incurred a large loss on a major project in the Pilbara.
One of the company’s biggest projects was a $90 million contract with Rio Tinto for the construction of accommodation at its Gudai-Darri (formerly Koodaideri) iron ore mine.
According to Pindan Group's website, the company has as many as 18 projects under construction in WA, including the $24 million Hilton Garden Inn Albany, Willing Property’s $6.9 million apartments in Mount Lawley, and Rosewood Care Group’s $53 million Aged Care Facility in West Perth.
Business News understands the company also holds a number of contracts for state government projects, including $10.9 million in upgrades to Hedland Senior High School and a $35 million per year contract with the Department of Communities to maintain social housing in the state's north-west.
A spokesperson from the Department of Finance told Business News the state government had heard reports suggesting that Pindan may be experiencing difficulties, but was awaiting further advice from the company before making any further comment.
Pindan also has a $3.4 million contract for work on Fortescue Metals Group’s Iron Bridge magnetite project and is spearheading the City of Fremantle’s $50 million Walyalup Civic Centre development at Kings Square. Business News understands that project has not been affected.
Property investment consultancy Momentum Wealth currently has two apartment developments worth $25 million under construction with Pindan Group.
Information available at Pindan’s construction sites indicates a host of major companies are involved with those projects, including Stantec, technical and management support services AECOM, infrastructure and environmental services company Cardno, construction services company SRG Global, Scanlan Architects, Peritas Group and Sedgman.
However, it is unclear whether those companies are subcontracted directly and whether they are still involved with the projects.
Bankwest partly financed the Highgate project, Business News understands, but a spokesperson for the company said it was not in a position to comment on the matter.
During a press conference this morning, Premier Mark McGowan said the state government was monitoring the situation but that he was surprised by the news, particularly given the state of WA’s construction market.
“Obviously, these are matters outside of our control,” he said.
“Fortunately, we have an extremely strong building and construction market at the moment and there is a lot of work out there for subcontractors and workers across the state.
“They are matters we will watch carefully and we will look at what we can do to assist.
“I must say, I find it a bit surprising that this has occurred given the state of the market - it’s so hot.
"But sometimes these things happen.”
Nationals WA Commerce spokesperson Vince Catania said speculation regarding Pindan Group’s future was causing concern for many subcontractors awaiting substantial payments for work already undertaken and said the state government had an obligation to settle unpaid invoices.
Given significant state funding had been provided to Pindan, he said the government had a responsibility not to leave subcontractors out of pocket for state government work.
“At the moment we have tradies who are refusing to undertake further work for Pindan because of fear they won’t be paid,” he said.
“Labor promised better protections for subcontractors, in recognition of the significant risks they take on, which included establishing a trust account for government projects to guarantee payments were made between head contractors and subcontractors.
“Labor never delivered on this promise, leaving subcontractors vulnerable to devastating losses in the event of the head contractor entering administration."
Business News is a registered creditor of Pindan in relation to a small advertising contract.
