Justice McKerracher of the Federal Court of Australia (Perth) yesterday appointed David Hodgson and Andrew Hewitt, of Grant Thornton, as liquidators to ASX-listed Diploma Group Limited (Receivers and Managers Appointed) (Provisional Liquidators Appointed) and its nineteen subsidiaries following an application by ASIC. The subsidiaries are:
1. Diploma Construction (WA) Pty Ltd (Receivers and Managers Appointed) (Provisional Liquidators Appointed);
2. DGX Construction Pty Ltd (Receivers and Managers Appointed) (Provisional Liquidators Appointed);
3. Diploma Properties Pty Ltd (Provisional Liquidators Appointed);
4. Diploma TCO Holdings Pty Ltd (Provisional Liquidators Appointed);
5. Diploma Construction (NSW) Pty Ltd (Provisional Liquidators Appointed);
6. Diploma Capital Pty Ltd (Provisional Liquidators Appointed);
7. Allegro Realty Holdings Pty Ltd (Provisional Liquidators Appointed);
8. Diploma Development Management Pty Ltd (Provisional Liquidators Appointed);
9. Weststructure Pty Ltd (Provisional Liquidators Appointed);
10. 24 Flinders Lane Pty Ltd (Provisional Liquidators Appointed);
11. 176 Adelaide Tce Pty Ltd (Provisional Liquidators Appointed);
12. Rockingham Serviced Apartments Pty Ltd (Provisional Liquidators Appointed);
13. Chemlabs Emporium Pty Ltd (Provisional Liquidators Appointed);
14. Allegro Realty Pty Ltd (Provisional Liquidators Appointed);
15. 300 Lord St Pty Ltd (Provisional Liquidators Appointed);
16. 303 Campbell St Pty Ltd (Provisional Liquidators Appointed);
17. 254 West Coast Hwy Pty Ltd (Provisional Liquidators Appointed);
18. Subiaco Residential Apartments Pty Ltd (Provisional Liquidators Appointed); and
19. Diploma Capital Securities Pty Ltd (Provisional Liquidators Appointed)
(collectively, the Diploma Subsidiaries).
ASIC made the application in relation to Diploma Group Limited and the Diploma Subsidiaries to protect the interests of shareholders, investors and creditors.
ASIC's investigation into the Diploma Group is ongoing.
Mr Hodgson and Mr Hewitt had previously been appointed as provisional liquidators of Diploma Group Limited and the Diploma Subsidiaries on 22 May 2017. In addition, they (together with Matthew Donnelly, also of Grant Thornton) had previously been appointed as voluntary administrators by the directors of Diploma Group Limited, Diploma Construction (WA) Pty Ltd and DGX Construction Pty Ltd on 22 December 2016.
Mr Hodgson and Mr Hewitt have separately applied to the Court to be re-appointed as voluntary administrators of Diploma Group Limited pursuant to a deed of company arrangement proposed by a company related to the Di Latte family. The application is listed for hearing on 13 September 2017.
Creditors of the twenty companies placed into liquidation should contact the Liquidators if they have questions about their rights.
Background
Diploma Group Limited was a Perth-based commercial construction and property development company.
On 21 December 2016 a secured creditor appointed Martin Jones and Andrew Smith of Ferrier Hodgson as receivers and managers of Diploma Group Limited, Diploma Construction (WA) Pty Ltd and DGX Construction Pty Ltd.
Following this, on 22 December, the directors of Diploma Group Limited, Diploma Construction (WA) Pty Ltd and DGX Construction Pty Ltd appointed Matthew Donnelly, Mr Hewitt and Mr Hodgson of Grant Thornton as voluntary administrators (Administrators) to those three companies. Mr Donnelly later ceased.
The Administrators held the first creditors meeting on 6 January 2017.
The second creditors meeting held on 8 May 2017 was adjourned for up to 45 days to allow the Administrators to consider further information that came to light after ASIC commenced proceedings against the Diploma Group.
On 22 May 2017 Mr Hodgson and Mr Hewitt were appointed as provisional liquidators of Diploma Group Limited, Diploma Construction (WA) Pty Ltd and DGX Construction Pty Ltd (as well as the remaining Diploma Subsidiaries). Their appointment as Provisional Liquidators brought the previous administrations of the three companies to an end.
On 13 September 2017, Justice McKerracher of the Federal Court of Australia (Perth) heard the application by David Hodgson and Andrew Hewitt, of Grant Thornton, to be re-appointed as voluntary administrators to ASX-listed Diploma Group Limited (Receivers and Managers Appointed) (Liquidators Appointed). His Honour reserved judgement.
Editor's note:
Mr Hodgson and Mr Hewitt of Grant Thornton successfully applied to the Federal Court to be re-appointed as voluntary administrators of Diploma Group Limited for the purposes of a deed of company arrangement proposed by Cockburn Central West Pty Ltd (ACN 607 874 019).
Despite the appointment, their current role as Liquidators of Diploma Group Limited and its nineteen subsidiaries will continue, however in respect of Diploma Group Limited their functions as Liquidator will be suspended during the period of the voluntary administration.
ASIC had opposed the application principally on the basis of the potential for a perceived lack of independence arising from holding dual roles. It is anticipated that at the second creditors' meeting (in approximately four weeks), creditors of Diploma Group Limited will have an opportunity to vote on the deed of company arrangement, after receiving the Administrators' recommendation on whether the deed should be approved or Diploma Group Limited should proceed to be wound up.