J.M. Kelly director grilled over $2m loans
STRUGGLING building company J.M. Kelly Group made loans totalling more than $2 million to firms with no assets in the lead up to its collapse last year, a court has heard.
The Federal Court heard that the transfers in 2017 from J.M. Kelly Builders, the main operating arm of the construction firm, to other companies within the group that had negative assets on their balance sheet of over $10 million.
The revelation came as J.M. Kelly director John Murphy continued to give evidence into the $50 million failure of the Rockhampton based company that cost 200 jobs.
Mr Murphy, under questioning from barrister Craig Wilkins who is acting for liquidator Derrick Vickers, said he could not recall the loans or why they had been made.
He denied he and his sister Elizabeth, the group's financial controller, were the only people authorised to make the loans.
"It could have been done by other people in the accounting department," Mr Murphy said. Mr Wilkins asked Mr Murphy how much due diligence had been done before the loans were made and whether he was aware the companies receiving the loans had no assets.
"Did you put your mind to whether creditors of J.M. Kelly Builders would be concerned about more than $2 million being transferred out of the company?" Mr Wilkins asked. Mr Murphy did not recall the loans being made. Mr Murphy also was asked about his access to the company's accounting system and the deletion of certain documents. Mr Murphy denied deleting any documents and said he only accessed the accounting system to make payments.