Daily Bulletin

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  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

The government has suffered a blow with Family First senator Bob Day quitting parliament following the collapse of his building business.

Day, elected in 2013, has been the Coalition’s strongest crossbench supporter. He will be replaced by a nominee of Family First. Rikki Lambert, Day’s staffer, is nominating for the position.

Day said in a statement that the Home Australia Group of several companies has gone into liquidation.

While four members of the group all posted a profit in 2015-16, problems and losses associated with Huxley Homes had “seriously undermined the group’s balance sheet and ability to continue trading”, he said. He said that in 2015 he had gone back to the business to help either sell it or get an equity partner to recapitalise.

A contract had been signed to sell a 75% stake in Home Australia to Goshen Capital Resources, which was based in the Philippines. The funds from Goshen would have given enough liquidity for the Home Australia Group to trade out of its difficulties.

“As evidence of its ability to complete the deal, Goshen’s CEO Mr Anselmo Nolasco, produced documentation purportedly from HSBC (Hong Kong & Shanghai Banking Corp) Manila to CBA Melbourne.

"The funds to invest in Home Australia should have been transferred last week but each day there was a different excuse. After several high-level inquiries over recent days it became clear the HSBC-CBA document was fraudulent,” he said.

Day said he had based all plans to pay creditors and other commitments on this deal proceeding. “Given the strict ‘trading while insolvent’ rules that apply in Australia, it would not be possible now for the business to continue operating until another buyer is found.”

Day, set to lose his own home, said he was devastated by what had happened. He was “incredibly sorry” for the pain the collapse would cause. “I built my first house in Adelaide in 1979. By 1990 Homestead was SA’s largest homebuilder and has been profitable every year since.”

Day has been a big financial backer of Family First.

He said he had made two big mistakes – one was buying Huxley Homes and the other was “going into politics without putting into place a proper management structure for the business”.

“I will be working closely with the liquidator and offering a proposal to enable me to find a way to pay back every debt fully, no matter how long it takes.”

Authors: Michelle Grattan, Professorial Fellow, University of Canberra

Read more http://theconversation.com/family-firsts-bob-day-quits-senate-following-business-collapse-67158

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