LIQUIDATORS have launched a courtroom probe into the collapse of Newcastle building company Harvest Homes and it's links to a convicted Sydney fraudster.
A public examination will be held in the Federal Court over two days in March into the demise of the prominent Newcastle builder that went from turning over $16 million to collapsing in just over two years.
Seven people will be grilled at the hearing, including the two Hunter-based directors, Stephen Taylor and Dean Turner who started the business in 2010, and former shareholder Oliver Roths, also known as Oliver Banovec.
Banovec was sentenced in 2010 to seven years' jail for fraudulently using an investor's money to support his business. He was found guilty of five counts of fraud, two counts of perjury and one count of destroying documents relevant to an Australian Securities and Investment Commission (ASIC) investigation into four companies he controlled, which ended up in liquidation.
Court documents reveal Banovec was running a mortgage broking business, Capital Trust, and took money from an investor, who said he lent $1.3 million to Banovec or his company at interest rates of up to 50 per cent expecting the funds would be on-lent to borrowers and secured with mortgages. But the five clients identified in paperwork supplied by Banovec never applied for any loans and the money was used to run Banovec's business.
Banovec, who changed his name to Roths after his conviction, was given a non-parole period of four years and nine months and was disqualified from managing corporations for five years from the date of his release from prison.
The 43-year-old became a shareholder in GLFB Pty Ltd, trading as Harvest Homes, in July 2017 as part of an ambitious plan to finance and build at least 38 homes at Warnervale, on the Central Coast.
Roths told the Newcastle Herald last year a company he is now a director of, AXL Financial, lost $3.5 million in the Harvest Homes crash.
Harvest Homes and subsidiary Harvest Homes (Properties), collapsed with combined debts of more than $5 million mid-last year.
According to liquidator Thomas Dawson, of DCL Advisory, Harvest Homes turned over $16 million in the 2016-17 financial year. Over the next financial year the company's revenue dropped 45 per cent to $9 million. Over the same time, it went from making $440,000 in profit to losing $380,000.
Mr Dawson said the public examination was designed to get to the bottom of the firm's demise, after he had been unable to access a range of requested information about the company's workings.
"Public examinations provide a means to a liquidator to examine officers of a company and any other person who may be able to provide information about the companies examinable affairs," he said. "It incudes such things as the control of the business, trading, transactions, property, liabilities of the company, as well as matters concerned with ascertainment of a person who has been financially interested in the success or failure of a company. In addition, it can assist ascertaining any person who has been able to control or materially influence the policy of a company."
