creditors told hst likely to be liquidated

http://www.abc.net.au/pm/content/2012/s3525406.htm

DAVID MARK: The creditors of the failed Hastie Group have been told they're unlikely to get much of their money back, and the company should probably be liquidated.

Creditors meetings have been held across the country today in the wake of Hastie's collapse last month.

There are still about 1,500 former Hastie employees with no job.

Liz Hobday reports.

LIZ HOBDAY: The Hastie Group went under late last month, owing most of the major banks more than $500 million and thousands of other creditors another $100 million.

Administrators today confirmed the fears of many, telling creditors it's unlikely they'll get anything back.

Ian Carson is the chairman of administrators, PPB Advisory.

IAN CARSON: We don't know yet, however, we would be surprised if the ordinary creditors received any extensive return, when you think that the banks are owed over $500 million.

LIZ HOBDAY: The administrators held meetings for Hastie creditors in most Australian capitals today.

Luis Rodriguez was at the meeting in Melbourne and says his company, Hydrochem, lost a quarter of a million dollars in the collapse.

LUIS RODRIGUEZ: It's a big shock for us. We are a small Australian company. As you can imagine, a quarter of a million dollars is big money for us.

LIZ HOBDAY: The Hastie Group was a major engineering services firm employing more than 7,000 people worldwide.

It brought in the administrators, after Hastie discovered one of its businesses in Western Australia had been falsifying accounts, and investors refused to refinance Hastie's loans.

Its collapse left 2,700 people out of work in Australia alone, but about 1,200 have since found jobs filling Hastie's former contracts.

Creditors were also told today, two more of Hastie's 44 businesses have been sold, taking the total to five, though it's now unlikely there will be further sales.

IAN CARSON: We've sold three further businesses - Airducter Pty Ltd in the Northern Territory, Norfolk Maintenance Holdings in Victoria and M&H Air Conditioning Pty Ltd. That will result in the saving of a further 35 jobs.

LIZ HOBDAY: But it seems that ultimately Hastie will have to be liquidated.

Ian Carson.

IAN CARSON: I think it's highly likely that the companies will go into liquidation but that will be up to the creditors to decide based on a recommendation made by the administrators.

LIZ HOBDAY: Ian Carson says it's early days in the investigation of the Hastie collapse, and administrators are still looking into accounting irregularities totalling about $20 million.

IAN CARSON: Most of our work has been actually to secure the records and to image them so that we've got them preserved and most of our work has been to get people back to work and to get asset sales, business sales. So that's been our key focus. As we move past that phase then we'll start to do our more detailed investigations.

LIZ HOBDAY: There's also the problem of Hastie's accounts in the United Arab Emirates. Someone within Hastie transferred more than $3 million from Dubai to Australia just before the collapse, jeopardising the entitlements of 1,500 workers in the UAE.

But Ian Carson says there's hope that some of those employees can find work on Hastie contracts.

IAN CARSON: That's a complex scenario but we're working that through with some of the local people there. I think we're down to about five Australian employees, less than 10 Australian employees left in the Middle East. Some of those want to stay, some of those want to leave. We're working with those and local contractors who want to take over some of the employers, up to 500 employees could be taken over.

LIZ HOBDAY: Hastie's administrators will go to the Federal Court next week to ask for more time to complete its investigations, before creditors vote on Hastie's future.

A final decision on liquidating the company could be up to six months away.

DAVID MARK: Liz Hobday.