Building executive ‘fabricated’ figures, court hears

MORE bombshells at the JM Kelly Group public examination in the Federal Court.

The court heard that Elizabeth Murphy, the financial controller of the failed group, allegedly fabricated the amount of debt owing to the group in figures given to the building watchdog. Barrister Craig Wilkins, acting for JM Kelly liquidator Derrick Vickers of PwC, told the Federal Court that the amount of trade debt owing to the group and provided to the Queensland Building and Construction Commission (QBCC) in 2017 was $1.7 million higher than figures given to the group's accountant.

 

JM Kelly financial controller Elizabeth Murphy.
JM Kelly financial controller Elizabeth Murphy.

Mr Wilkins suggested to Ms Murphy that trade receivables, or debts owing from customers and others, had been inflated by adding in intercompany debt from the JM Kelly Group that could not be counted as assets. The QBCC was at the time investigating whether the Rockhampton-based building company, which collapsed last year owing $30 million, had sufficient assets to keep its building licence.

Mr Wilkins said the names of the trade debtors provided to the QBCC had been removed so they could not be checked.

"I suggest to you that what you did was that you fabricated the list of trade debtors and you did it to hide from the QBBC the intercompany receivables," said Mr Wilkins. Ms Murphy denied fabricating the figures provided to the QBCC and said the difference in the amounts could be explained by adding in GST and various progress payments.

 

BANK TRANSFERS

Earlier the court heard Ms Murphy had made a series of six-figure transfers from her personal bank account including to her brother's family after the collapse of the building company.

She said that she received $520,795 from the sale of her Rockhampton property in May this year which was deposited in her Bank of Queensland account.

Ms Murphy told the court that she made one transfer of $240,000 to another of her accounts and one of $102,000 to the wife of her brother John Murphy. Mr Murphy was the director of the JM Kelly Group.

Under questioning from Mr Wilkins, Ms Murphy said the transfer to her sister-in-law was to help the family after John Murphy was diagnosed with cancer. "John can't work and has three young children to support," Ms Murphy said. She said other funds were used to pay her legal expenses flowing from the public examination. The hearing continues this week.