QHT Investments, company linked to helping NAB avoid fallout of Walton Construction collapse, put into liquidation

A big-four bank used this investment firm to shield itself from a construction company collapse while subbies were left $30 million out of pocket. Now the investment company has gone bust too. Here’s what it means.

Subcontractors continued to work for Walton Construction for months after it became insolvent.

AN investment company used as a vehicle to shield National Australia Bank from a devastating construction company collapse while subcontractors continued to lose money has itself gone into liquidation.

QHT Investments was put into liquidation 11 days after the court ordered it pay almost $680,000 to the liquidators of Walton Construction (Qld), which collapsed in October 2013 owing $30 million to 600 subcontractors and other businesses.

Michael Humphris of William Buck Melbourne was appointed by QHT members at a general meeting on Christmas Eve.

In his scathing Federal Court decision, Judge Roger Derrington said the big bank was part of a scheme to eliminate its financial exposure to the construction company’s impending failure.

The court found QHT was linked, through its sole director Patrick McCurry, to a business advisory outfit called Mawson Restructure and Workouts.

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The court found National Australian Bank worked to protect its money before subcontractors were even aware Walton was failing.

In his judgment, Judge Derrington said Mawson, “at the apparent encouragement of the NAB”, was appointed well before Walton Constructions went into administration to sell assets and contracts from it into two new companies, Peloton and Lewton, which have since also failed.

NAB was the lead financier to Walton via loans guaranteed by Walton boss Craig Walton.

ASIC disqualified Mr Walton from managing companies for four years over the failure of his Walton Group of companies, which together owed $78 million to creditors when they went under.

Among the arrangements struck by Mawson was the sale of an $18.8 million debt owed by Walton Construction to Walton Construction Qld, which QHT Investments bought for just $30,000 — less than a month before Walton was placed into administration.

Judge Derrington found the purchase of that debt was a voidable transaction and ordered QHT pay the Walton liquidators the $679,453.80 they sought plus costs.

His judgment said Mawson’s objective had been to protect NAB from losing money, to “relieve Mr Walton of liability under his guarantee” to the bank and also to glean a profit for Mawson and its related companies.

“The “restructuring” services provided by Mawson were for the purposes of advancing the interests of the National Australia Bank, which was the major secured creditor, and limiting the exposure of Mr Walton and others associated with him pursuant to guarantees which had been provided to the Bank,” the judgement said.

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Subbies were left more than $30 million out of pocket when Walton’s Queensland company failed.

Mawson was put into external administration six months after Walton.

Walton Construction Qld creditors have been told the best return they can hope for is 1-2 cents for every dollar they’re owed — but even that is unlikely.

Subcontractor Les Williams, whose earthmoving business was owed $696,000 when Walton collapsed, said QHT’s liquidation was inevitable.

Through his support organisation Subcontractors Alliance, he unsuccessfully pushed for the Royal Commission into the banking and finance sectors to include banks’ involvement in construction company failures.

“What the judgment did do was confirm everything we have said about NAB’s dishonest involvement with Walton,” he said.