The Ministry of Business, Innovation and Employment (MBIE) is investigating whether troubled property developer Du Val breached a law requiring it to hold money in a special fund for subcontractors.
The probe comes after the Du Val Group and its associated entities were placed in interim liquidation by the High Court earlier this month, leaving a swathe of contractors and investors facing significant financial uncertainty.
MBIE confirmed to 1News that it is investigating a complaint about the alleged breach of retention regulations by Du Val companies.
The law requires firms to hold subcontractor payments in a separate bank account to ensure payment in case of financial trouble.
Team Cabling director Dave Burt, a 45-year industry veteran, fears losing hundreds of thousands of dollars over Du Val projects.
He told 1News he had requested proof of the retention funds – as mandated by law – but his request was refused.
"Most of the money we're owed at the moment is retentions and stuff that is due to be paid," he said.
"It's not a good sign. I would suspect that there possibly is some mischief there, just by the virtue of the fact that they haven't responded."
1News asked Du Val's lawyers if money was kept in a retention fund, but received no response.
Earlier this month, the Financial Markets Authority successfully applied for Du Val and its web of entities to be put into interim receivership at the High Court.
The multimillion-dollar property developer’s under investigation by the Financial Markets Authority. (Source: 1News)
The company, founded by Kenyon and Charlotte Clarke, had built its name through major housing developments and other ventures.
Multiple parties, including investors and contractors, have reported substantial sums owed to them by Du Val – including a number of Master Electrician members.
The trade organisation's chief executive Alexandra Vranyac-Wheeler said she didn't want people to "suffer in silence".
"We're offering case-by-case legal support for those that are directly impacted, so we're worried about these people's mental health and wellbeing."
Vranyac-Wheeler called for the enforcement of retention fund regulations.
"In the event of non-compliance, we would be wanting to see some sort of penalties and/or prosecution in this case. Otherwise, it sets a precedent for a really relaxed approach for people who could be losing their homes, for people who will be having families impacted by this," she said.
"That's not OK."
An unfinished Du Val development. (Source: 1News)
MBIE has never taken legal action against anyone for failing to meet the law around retentions – 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?" he asked.
Apartment developer Du Val Group in receivership, FMA investigating
High Court has approved the Financial Markets Authority’s request for asset preservation orders.
Fri, Aug 2
Du Val receivership: Tradies, cleaners left out of pocket
"I was on the verge of losing my house, because that was the only thing that I could have done to be able to pay my creditors," one sub-contractor told 1News.
Monday 6:56pm
2:43
The liquidators, PwC, will examine whether any money remains in a retention fund as part of their probe into Du Val's financial affairs.
Are you impacted? Email: katie.bradford@tvnz.co.nz
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
