Claims of fraud, law breaches in Vystal building firm

It collapsed in January owing $4.1 million to 201 creditors, and now an investigation into the activities of Vystal Construction and Development has uncovered significant allegations.

CLAIMS of fraudulent activity, non-payment of workers and questionable transactions are the subject of investigations into a Brisbane construction firm that collapsed in January owing $4.1 million to 201 creditors.

MJM Projects, trading as Vystal Construction and Development, was one of at least five companies operating under the banner of Martin Graham’s Vystal Property Group when it collapsed with just $2.17 in its account.

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Now, investigations by a liquidator into Vystal Construction and Development has uncovered claims of fraud by an employee and an alleged breach of corporate law.

The company was operating a residential building business when the Queensland Building and Construction Watchdog terminated its licence on January 22.

It went into liquidation the same day owing dozens of subcontractors, employees, businesses and banks a total of $4.03 million.

Mr Graham, the company’s sole director, has raised concerns about “fraudulent activities” by a former employee with liquidator Steven Staatz.

The detail of the allegation has not been provided, but Mr Staatz has indicated he is investigating.

There is no suggestion of wrongdoing by Mr Graham.

Several former employees of Vystal Construction and Development are frustrated their superannuation and leave entitlements were not paid.

One, who requested their name be withheld, said workers were now ”scraping cash together to survive”.

“It just shocks me,” they said.

Mr Graham did not respond to a request for comment.

Mr Staatz’s probe reveals the company’s failure stemmed from a lack of revenue to support its activities while it suffered consistent trading losses and a lack of accounting information which “is likely” to have prevented the identification of losses earlier.

He also notes there are “significant indebtedness” owed by several other of Mr Graham’s companies to Vystal Construction and Development.

It is owed $2.6 million by three companies operated by Mr Graham – who has advised the loans are unable to be repaid.

Financial details of Vystal Construction and Development reveal the company made a $2.5 million loss in the six months to January 2020 and a $20,039 loss in the previous six months.

Mr Staatz has notified the Australian Securities and Investments Commission of a suspected breach of corporate law, and also uncovered a number of potential voidable preferential payments to related and non-related creditors.

Investigations are also continuing into possible uncommercial transactions.