The buck stops with Family First’s Bob Day, says liquidator

The Australian 12:00am November 5, 2016

Rebecca Puddy

Bob Day may have committed a federal offence by shifting money between his different housing businesses, his company’s liquidator says.

McGrathNicol liquidator Matthew Caddy told creditors of Homestead Homes — the South Australian arm of Mr Day’s parent company Home Australia — he would be investigating the movement of money among group companies and millions of dollars in payments to Mr Day and his political party Family First.

“We will investigate thoroughly the conduct of the director and how he conducted the affairs of his business and why we’re in a situation where there are millions of dollars worth of debts that need to paid,” Mr Caddy said yesterday.

“There are inter-company loans between all the companies in the group. We need to … understand and reconcile those loans to trace where money has moved from one group to the other. The director has obligations to creditors and to each company individually, so if he has breached his obligations in one company by moving money to another company, for instance, then that may be an offence.”

Home Australia paid a $2.67 million fully-franked dividend to Mr Day and his partner in 2012-13, with Mr Day that year making a nearly $1.5m donation to Family First by loaning the party money and later forgiving the loan.

Mr Caddy said as sole company director, Mr Day was signing the cheques for his businesses. “The buck stops with him,” he said.

Homestead Homes has 210 creditors claiming almost $5m, with Home Australia almost $38m in debt. More than 100 unsecured Homestead Homes creditors were yesterday told the money owing to them was gone. They included small family businesses and 28 people who had paid deposits on their houses but had not arranged indemnity insurance in time.

“We do not expect that there will be a return to ordinary unsecured creditors,” Mr Caddy said.

The only secured creditor is National Australia Bank, which is owed $11.44m.

Outside the meeting, Tracey Van Zoelen broke down in tears as she spoke of now-abandoned plans to have a family holiday and upgrade the business van to a newer model.

The painting business she owns with husband Ron stands to lose $25,000 from the collapse of the former Family First senator’s group of housing companies, equivalent to one-quarter of their business’s annual takings.

Now they are trying desperately to find a way out of the financial losses they face as unsecured creditors.

“We were on our way to Homestead to find out why we hadn’t been paid for three months when we got the call,” Ms Van Zoelen said.

Mr Van Zoelen said he never thought a company like Home Australia could collapse. “We’re annoyed with ourselves for letting this happen — if we’d known about it, we would have gotten out and there’s plenty of work out there,” he said.