Metricon CEO Mario Biasin shifted assets ahead of death, taxpayers at risk

Mario Biasin, the deceased CEO of ailing building giant Metricon, allegedly shifted his assets prior to his death in a move that could leave taxpayers liable if the company collapses.

Metricon has been contracted to build more than 1300 homes in NSW and about 300 are estimated to be currently under construction.

The deceased CEO of ailing building giant Metricon allegedly distributed his assets prior to his death in a move that potentially invalidated part of the company’s deal with the NSW government to cover its losses and could leave taxpayers liable if the company collapses.

The Weekend Australian has confirmed through multiple sources that Mario Biasin shifted ­assets and other personal property before his sudden death in May at the age of 71, from what the company later attributed to mental health issues.

The irregular movements of Biasin’s assets were brought to the attention of government agencies later that month, prompting an ­investigation of how the company came to be insured by the NSW government against potential hardship, despite concerns raised about these arrangements in 2020.

The home builder, which sought an urgent injection of shareholder capital last month to stay afloat, had been insured by Insurance and Care NSW – known as icare – to cover any losses in the event of collapse. Should that occur, the company is likely to leave hundreds of customers rushing to icare seeking compensation for unbuilt homes.

Metricon has been contracted to build more than 1300 homes in NSW and about 300 are estimated to be currently under construction. Concerns about its financial health have persisted for months but extensively played down by its executives, despite its requirement for emergency funding and an extension of its credit facility with its lender.

In NSW, all builders and contractors require insurance coverage with icare under its Home Building Compensation Fund scheme, which provides a safety net for homeowners facing incomplete or defective building works.

Now facing an ongoing investigation by the insurance regulator, icare is said to have underwritten Metricon’s eligibility and certification by relying on deeds comprising the personal property of Biasin and other Metricon ­directors.

Several sources are alleging these deeds are close to being worthless. Investigations into these arrangements are seeking to establish whether they have been effectively annulled or breached because of Biasin’s distribution of assets, or more simply because of his death.

The matter remains the subject of ongoing review by the NSW State Insurance Regulatory ­Authority.

This newspaper’s Margin Call column revealed this week that SIRA formally wrote to icare in 2020 raising concerns about its ­arrangements with Metricon. In response, icare said that it self-­reported the matter to SIRA and, following its response, put in place a plan to “resolve the issue, which has been implemented”.

But exactly how the issue has been resolved remains unclear, with icare still attempting to untangle taxpayers from significant financial exposure in the event that Metricon collapses, a matter which has kept government and agency officials panicked for weeks.

For its part, Metricon remains locked in negotiations with icare to try to lift newly placed ­restrictions on its ability to take on new customers, which will assist with bolstering its trickling cash flows. Those restrictions, which ­require Metricon to complete three home builds for every new additional customer, were instated by icare to limit compensation costs in the event the company took on a raft of new customers and fell into administration ­regardless.

Metricon acting CEO Peter Langfelder is understood to have met with icare executives this week to discuss the company’s ­insurance arrangements in light of the death of Biasin.

“The assurance that Metricon Homes has provided to icare has not changed,” Mr Langfelder said.

“Metricon Homes is having ongoing constructive discussions with icare following its co-founder and major shareholder’s sudden and unexpected death. Metricon Homes remains confident that new assurance arrangements will be provided to the mutual satisfaction of icare and Metricon Homes arising from the change in cir­cumstances.”

Mr Langfelder also said the board of directors was “currently unaware of any recent transactions completed by its late co-founder or any other person on his behalf which would have been averse (sic) to the interests of icare”.

However, The Weekend Australian has confirmed that the distribution of assets has remained a source of ­elevated concern among agency officials examining the Metricon saga over the past month.

This has included ongoing finger-pointing between SIRA and icare over the terms of the insurance provided to Metricon and whether it conformed to guidelines.

A spokesman for SIRA told The Weekend Australian the agency was continuing its review of icare’s “application of the eligibility model to Metricon”, while an icare spokesman defended its underwriting and eligibility guidelines, saying these were reviewed each year by SIRA, effectively leaving the matter at the feet of the regulator.

“Icare cannot comment on a particular builder due to confidentiality obligations,” the spokesman said.

Metricon struck a rescue deal with its lender, Commonwealth Bank, and secured $30m in capital from investors in late May at the height of concerns in NSW and Victoria about its cash flow and solvency. At the time Mr Langfelder, the company’s acting CEO, said the company remained profitable and dismissed suggestions it was facing significant financial stress.

The Australian has previously reported that the NSW government has been holding discussions on a rescue package for both Metricon and the broader building sector due to a series of factors, including rising material costs and weather events, affecting their operations.