$25m loan web, personal expenses probed in Vansan Construction collapse

The liquidator of a collapsed Melbourne builder is probing whether personal expenses, including the director’s wife’s mortgage, were disguised as company debts, as its $6.5m debt pile is laid bare.

The liquidator of a collapsed Melbourne construction company is probing whether personal expenses were disguised as company debts. Picture: Supplied

The liquidator of a collapsed Melbourne construction company is probing whether personal expenses, including mortgage payments on a property owned by the director’s wife, were disguised as company debts.

News Corp previously revealed the builder, Dandenong-based Vansan Construction, had been ordered into liquidation in August, as claims surfaced of significantly delayed works that left one “extremely stressed” homeowner with over 100 defects.

The company’s complex web of interrelated party loans totalling over $25m has been revealed, contained in a new report lodged with the corporate regulator by liquidator Leon D’Souza of HM Advisory.

It comes as the true fallout of the collapse is also brought to light, with $6.5m owed to creditors including $3.7m and $2.7m to secured and unsecured creditors respectively.

News Corp previously revealed the builder had been ordered into liquidation in August. Picture: Vansan Construction

Director Sutharsan Shanmugalingam, who goes by Shan Sutharsan on the company’s website and on building contracts, has been the sole director and secretary since the business was registered in 2003.

Vansan Construction describes itself as a “leading builder in southeast Melbourne”, claiming it has constructed more than 2000 residential developments throughout the area.

Its website says the business has also delivered projects in Sydney, and had expanded in recent years to several international projects in Sri Lanka and India, with offices listed in Dandenong in Melbourne, and in Seven Hills in Sydney.

Financial records from 2024 show the company owed nearly $25m to related parties, including $18.9m in loans to its director, although the liquidator alleged the business received no clear benefit from the reported transactions.

Payments toward the mortgage of a property owned by the director’s wife were credited to the director’s loan account, he alleged.

“Since 30 June 2024, no externally prepared financial accounts have been prepared and the company’s management accounts have been subject to significant amendments, including following the date of my appointment without my authority,” the liquidator said.

Director Sutharsan Shanmugalingam. Picture: Vansan Construction

The accounts also showed a debt of $25.2m owed to the company by Vibhuti Property – of which his wife is the sole director and shareholder – that had since been erased.

“The related party dispute notes (from the director) included claims that the company was involved in a project for Vibhuti which experienced delays exceeding three years, which resulted in significant financial damages,” Mr D’Souza said.

“Then the debt was reduced to nil within the management accounts, the basis for which remains unclear.”

An additional $1.1m was owed to the company by Vibhuti Property, which Mr Shanmugalingam said was repaid in full by his wife.

The liquidator said the director had advised him that the significant related party debts and loans disclosed in the 2024 financial statements were “incorrect”.

“The director initially provided a worksheet on 25 August 2025 which he advised showed all related party debts off-set against each other with a residual balance owed to him,” he said.

“Based on the company’s books and records received to debt, the quantum of the related party debts recorded as owed by the company and recorded within the (worksheet) is unable to be verified.”

The liquidator said the director had advised him that the significant related party debts and loans disclosed in the financial statements were “incorrect”. Picture: Vansan Construction

Mr Shanmugalingam also told Mr D’Souza that several of his wife’s businesses, including a development company and a flower shop, were owed upwards of $10m by the company.

The liquidator said there were an estimated 20 unsecured creditors with claims totalling $2.7m – made up of $2.2m owed to the tax office and over $500,000 to trade creditors.

An estimated $37,688 is owed to employees in superannuation.

Mr D’Souza said he was also aware of several former customers who might file claims in the liquidation over incomplete or defective work.

It is not yet known whether creditors can expect to receive any money back from the liquidation.

Vansan Construction was up against two winding up orders in the Supreme Court of Victoria, when it was ordered into liquidation in August this year.

The builder had faced allegations of unfair contract terms, refusing clients the right to inspections and issuing final payment claims while works were still progressing and incomplete.

One customer told News Corp that they had launched legal action against Vansan, attempting to recover $150,000 after they were left with more than 100 defects and incomplete work on their project.

Vansan Construction was contacted for comment.

Originally published as $25m loan web, personal expenses probed in Vansan Construction collapse