PHOTO: Kenyon Clarke. FILE
The Ministry of Business, Innovation and Employment (MBIE) is investigating whether property developer Du Val breached laws requiring it to hold money in a special fund for subcontractors.
This investigation follows the interim liquidation of the Du Val Group and its associated entities by the High Court earlier this month, which has left numerous contractors and investors facing significant financial uncertainty.
MBIE confirmed to 1News that it is examining a complaint about the alleged breach of retention regulations by Du Val companies. The law mandates that firms hold subcontractor payments in a separate bank account to ensure payment in case of financial trouble.
Dave Burt, director of Team Cabling and a 45-year industry veteran, fears losing hundreds of thousands of dollars over Du Val projects. He requested proof of the retention funds, as required by law, but his request was denied.
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“Most of the money we’re owed at the moment is retentions and stuff that is due to be paid,” Burt said. “It’s not a good sign. I suspect there may be some mischief, just by the fact that they haven’t responded.”
1News reached out to Du Val’s lawyers about the retention fund, but received no response.
Earlier this month, the Financial Markets Authority successfully applied for Du Val and its associated entities to be placed into interim receivership by the High Court.
The company, founded by Kenyon and Charlotte Clarke, gained prominence through major housing developments and other ventures. Many investors and contractors, including several Master Electrician members, have reported substantial sums owed to them by Du Val.
Alexandra Vranyac-Wheeler, CEO of the trade organisation Master Electricians, said she didn’t want people to “suffer in silence.”
“We’re offering case-by-case legal support for those directly impacted, as we’re concerned about these people’s mental health and wellbeing.”
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Vranyac-Wheeler called for the enforcement of retention fund regulations. “In the event of non-compliance, we want to see penalties and/or prosecution. Otherwise, it sets a precedent for a relaxed approach, potentially resulting in people losing their homes and impacting families,” she said. “That’s not OK.”
MBIE has never taken legal action against anyone for failing to meet retention fund laws, a fact that professionals like Burt and Master Electricians say must change.
“If there’s mischief, if someone doesn’t conform with that, who’s going to take a conviction?” Burt asked.
The liquidators, PwC, will investigate whether any money remains in the retention fund as part of their probe into Du Val’s financial affairs.
SOURCE: 1NEWS