Building watchdog QBCC suspends licence of De Luca Corporation

The building watchdog has suspended the licence of a major Queensland builder with an annual turnover of more than $230 million after it failed to meet the regulator’s financial requirements.

THE building watchdog has suspended the licence of Brisbane builder De Luca Corporation after it failed to meet the regulator’s financial requirements.

But the company, in a statement on Friday night, said it expected to resolve the issue over the weekend.

The Queensland Building and Construction Commission said De Luca was a large value licensee with an annual turnover of more than $230 million but it currently had a net asset position of negative $3.2 million.

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QBCC commissioner Brett Bassett said this asset value represented a risk to the sector.

“Last month, we issued the company with a show-cause notice and it has been unable to demonstrate that it meets mandatory financial requirements,” Mr Bassett said in a statement issued on Friday afternoon.

“Licensees which operate with insufficient liquidity and assets to support their turnover are operating with a heightened financial risk.”

De Luca Corp managing director Nic De Luca said he was shocked the suspension notification had arrived so late on Friday, at 4.45pm, leaving the company with no opportunity to defend or clarify its position.

“We provided the commission with our audited financials as a matter of course last week,” Mr De Luca said.

“We had received no notification or any indication before late Friday there was an issue.

“We believe there has been a technical misunderstanding of the audited accounts and we have engaged the commission this evening. From our discussions ... we are confident this matter (will be) resolved by Monday morning.”

The company has 21 days to show the regulator how it will meet the financial requirements, otherwise its licence may be cancelled.

Mr Bassett said while there were no current monies-owed complaints against De Luca, its failure to meet asset requirements was a breach of QBCC licence conditions.

“New laws which came into place earlier this year are designed to help provide Queensland’s building and construction industry with improved stability,” he said.

“Rules around assets and the liquidity of a company help ensure that when a company takes on a construction job they have the financial capacity to finish the job.

“This in turn helps provide stability to subcontractors, suppliers, investors and consumers and helps to minimise potential collapses.

Mr Bassett said the QBCC was giving licensees every opportunity to prove they were operating within the law.

“But I will not hesitate taking swift and appropriate regulatory and enforcement action when required,” he said.