Liquidators investigate insolvent trading claims against Eruliaf Earthmoving Pty Ltd

Claims a Sunshine Coast earthmoving company was trading while insolvent have been revealed, as well as investigations into the likely “undersale” of the business to related companies.

Fraser Earthworks.

A Sunshine Coast earthworks company estimated to owe debts in excess of $3m is currently being investigated for trading while insolvent, a report has revealed.

Liquidator at H and H advisory, Mohammed Shahin Hussain, was appointed as liquidator to Eruliaf Earthmoving Pty Ltd on November 2, 2023 and released his report to creditors on February 1, 2024.

One of the major creditors is the Australian Taxation Office, which according to Mr Hussain is owed an estimated $2.4m.

The Australian Securities and Investments Commission report to creditors seen by this publication showed the Chevallum-based earthmoving company, which traded as Fraser Earthworks, was owned by Samuel James Fraser who acted as the company’s director and secretary since the company was registered in September 2011.

In the report to creditors Mr Hussain states investigations into whether the company was insolvently trading were continuing as well as additional investigations into the sale of the assets and business in 2023.

Fraser Equipment Rentals Pty Ltd bought the assets, while the business was sold to Fraser Earthworks & Co Pty Ltd.

Both the purchasers are directed by Mr Fraser, according to the report.

The company sold its business to FEC2 (Fraser Earthworks and Co) on June 30, 2022 for $236,000, according to the report it is “likely that the business was sold at undervalue” adding the company had not provided evidence of valuations conducted prior to the sale.

Mr Hussain stated in the report it was his “preliminary view” the company showed signs of insolvency in the 2020 financial year.

“Based on the records in my possession, it appears that the company was insolvent by at least June 30, 2020,” Mr Hussain states in the report.

In the report Mr Hussain states there had been “difficulty” receiving information from Mr Fraser and the company.

“Throughout the liquidation, I have experienced difficulty in obtaining the books and records of the company,” the report stated.

Fraser Earthworks & Co declined to comment.