Key figures behind the $33m failure of construction business JM Kelly Group face questions in court

A key figure in one of Queensland’s biggest company collapses – the $33 million failure of JM Kelly Group – claims he is owed $1.5 million, including money he borrowed from his wife to “tip into the company”.

A KEY figure in the $33 million collapse of JM Kelly Group claims the companies owe him $1.5 million including unpaid holiday pay and loans.

Geoffrey John Murphy, who was a director of several companies within the group before resigning in 2016, said the funds owed included $400,000 in employee entitlements and loans he had made to company.

“I never took holiday pay and did not take a salary for several years,” said Mr Murphy, who was appearing in a Federal Court examination into the collapse.

Mr Murphy said he had borrowed money from his wife to “tip into the company” when required.

“If we had a client who had not paid I would put money into the company,” he said.

Mr Murphy told the court remained he a director of several companies following the collapse of JM Kelly Project Builders in 2016.

Geoffrey Murphy leaves the Federal Court today. Picture: John Gass/AAP

They included a company developing a parcel of residential land in Rockhampton and JM Kelly Pastoral which owned several properties in central Queensland. Mr Murphy, 78, said that since resigning from the building business in the middle of 2016 he had had a full time involvement in the pastoral business and was not aware of what had occurred within the group.

“I am going on 80 and some of these things I can’t recall,” he told the court. Counsel for JM Kelly‘s liquidators questioned Mr Murphy on why one of the companies within the group had been set up to take money owed to other companies within the group and not pass it on.

These funds appeared as a loan to those companies in the books with one company in the group Project Builders owed $6 million.

Mr Murphy said the system was standard business practice.

“It is what government does and what you do if you have a multitude of companies,” he said. “It was recommended by PWC.”

The court heard that JM Kelly Project Builders’ financial situation deteriorated when it became involved in a costly legal battle over a development on the Gold Coast.

“The project was for $50 million but we got paid less than the 50 million,” Mr Murphy said.

“There were changes which we never got paid for so we sued for $30 million plus costs.”

However, the company had adverse cost orders of $3 million made against it in favour of the developer following which Mr Murphy had to consider putting the company into administration.

EARLIER: FORMER DIRECTOR GRILLED OVER $33M JM KELLY COLLAPSE

A KEY figure in the $33 million collapse of J.M. Kelly Group remained a director of several companies following the failure of the Rockhampton-based builder, a court has heard.

Geoffrey John Murphy was a director of several companies within the group, before resigning in June 2016 following the collapse of the companies.

But Mr Murphy, who is today appearing in a Federal Court examination into the collapse, said he remained a director of a company developing a parcel of residential land in Rockhampton and J.M. Kelly Pastoral which owned several properties in central Queensland.

Mr Murphy, 78, said that since resigning from the building business in the middle of 2016 he had had a full-time involvement in the pastoral business and was not aware of what had occurred within the group since then.

J.M. Kelly collapsed in 2016, costing hundreds of jobs.

“I am going on 80 and some of these things I can’t recall,” he told the court.

Counsel for J.M. Kelly‘s liquidators questioned Mr Murphy, who is now a bankrupt, on why one of the companies within the J.M. Kelly group had been set up to take money owed to other companies within the group and not pass it on.

These funds appeared as a loan to those companies in the books with one company in the group J.M. Kelly Project Builders owed $6 million.

Mr Murphy said the arrangement was standard business practice.

“It is what government does and what you do if you have a multitude of companies,” he said. “It was recommended by PWC.”

The court heard that J.M. Kelly Project Builders’ financial situation deteriorated when it became involved in a costly legal battle over a development on the Gold Coast.

“The project was for $50 million but we got paid less than the 50 million,” Mr Murphy said.

“There were changes which we never got paid for so we sued for $30 million plus costs.”

However, the company had adverse cost orders of $3 million made against it in favour of the developer following which Mr Murphy had to consider putting the company into administration.

The examination continues.