Melbourne developer Simonds Group is the latest builder to fall foul of Queensland’s construction watchdog after failing to meet the regulator’s financial requirements.
The ASX-listed builder has had its building licence revoked for not providing evidence it had enough assets to support its revenue of more than $350 million.
The Queensland Building and Construction Commission has also pulled the licences of pest control giant Flick Anticimex and Christopher Contracting, a builder with offices in the Gold Coast and Perth.
The companies had not responded to urgent show-cause notices issued by the QBCC in April.
Pest control company Flick Anticimex was found to be operating with an asset base of $250 million less than the capital required to sustain its annual turnover, the QBCC said.
While Simonds operates nationally, its Queensland projects will be suspended until it rectifies the breach.
In a note to the ASX, Simonds Group said that its Queensland operations represent less than 10 per cent of its annual turnover.
“The group is responding to the notification and is working with the QBCC to address this issue,” Simonds chief executive said.
The financial reforms imposed by the regulator have tripped up a number of builders, including multinational giant Laing O’Rourke, after coming into force earlier this year.
Aimed at protecting subcontractors, the crackdown required builders with a turnover of more than $30 million to prove their financial health.
QBCC commissioner Brett Bassett said the reforms had improved the regulator’s ability to identify high-risk financial conditions.
“These laws are designed to uphold the stability of the industry and ensure that if a developer invests in Queensland, then the company they engage has a real capacity to finish the job,” Bassett said.
The reforms were prompted by a swathe of construction industry insolvencies across the state that left close to 7,000 subcontractors more than $500 million out of pocket.