King Facade funded by Mainzeal: liquidators
A Mainzeal subsidiary that has copped some of the blame for pushing the construction company into receivership owes over $14 million, its liquidators say.
King Facade Limited was put into voluntary liquidation on February 12 by shareholder Richina Global Real Estate Limited (RGREL) - part of a business empire built by Chinese New Zealander Richard Yan that includes Mainzeal Property and Construction Limited (MPCL) which collapsed earlier this month.
MPCL partially blamed supply chain problems out of China for its receivership, a problem believed to stem from delays in shipments of glass facades.
Liquidator BDO's first report on King Facade shows the firm has total assets of $4.4m and total liabilities of $18.9m, including $14.9m owed to MPCL.
Liquidator Andrew Bethell said it appeared that MPCL had been funding King Facade for some time, including $8.3m in a trading account and a $6.5m "historical balance".
The list of assets also shows $5.7m owed under an intercompany account with parent company RGREL.
The liquidator also listed a negative figure of $2.6m for "work in progress" which he said related to facade stock which the company held, but which may be subject to claims by construction clients.
The amount owed to the Inland Revenue Department is as yet unknown. King Facade also owes $282,000 to employees and $742,000 to trade creditors.
Another company, King Facade (NZ) Limited, shares the same owner as King Facade Limited but has not been put into liquidation.
Bethell said MPCL may also have been funding King Facade (NZ) Limited. A debt of $903,000 owed by the second King Facade company to the first one would require further investigation, he said.
The second King Facade company is a joint venture between RGREL (50 per cent), Shenzhen King Façade Decoration Engineering Co Limited (30 per cent) and Pacificflag Limited (20 per cent).
Further investigation was required to determine the relationship between the two companies, said the liquidator.