Mainzeal liquidators warn over complex deals
Mainzeal’s liquidators have warned they will take action if they find complex company restructuring by a former parent company left Mainzeal and related companies out of pocket.
RGREL, or Richina Global Real Estate, was put into liquidation in February, after the High Court found RGREL was unable to pay its debts.
In its first creditor report for RGREL, its liquidators BDO said that despite its requests, it had not been given and not been able to find detailed financial records of RGREL, ‘‘including the accounting ledger which we understand is located in China’’.
‘‘As such we have been unable to verify the accuracy of the Statement of Affairs.’’
BDO is also the liquidator of Mainzeal Property and Construction (MPCL), which collapsed in February last year, owing unsecured creditors more than $138m, and 12 other related companies.
RGREL and Mainzeal Group’s sole director Richard Yan is appealing RGREL’s liquidation.
BDO said the recovery of RGREL’s assets were uncertain at this stage.
‘‘We understand that there were three group restructures that occurred on or about 31 July 2012 and two at 31 December 2012 (involving 18 related entities) which impacted on the value and terms of intercompany and related party receivables and payables.’’
There was a high level of intercompany and related party transactions between RGREL, Mainzeal Property and others within the Mainzeal/Richina group, it said.
In one company restructure shortly before Mainzeal collapsed, RGREL transferred to MGL a debt it owed to Mainzeal Property of $15.2m, in exchange for the construction company’s shares, at a price of $17.6m.
‘‘As the transaction occurred only five weeks prior to MPCL being put into receivership, we consider those shares were worthless at the time of this restructure,’’ BDO said.
A related party payable to Richina Pacific (China) Investment totalling $38m to RGREL was waived, and the terms of the remaining receivables were altered in some cases.
The liquidators said they were continuing to investigate the validity of these restructures ‘‘and will take further action if we consider it to be appropriate’’.