Home > Forge debts mount amid claims of iffy spending

Forge debts mount amid claims of iffy spending

Editorial
article image

The amount of Forge Group’s debt has risen to more than $700 million as claims surface that managers made questionable spending decisions in the months leading up to the company’s collapse.

Administrator Ferrier Hodgson said it is aware of claims on social media that some senior managers cashed in their leave entitlements and relocated to Sydney at the company’s cost.

According to allegations several Forge managers had been relocated to Sydney at a cost of thousands to the company after Forge first revealed its power station contract problems, The Australian reported.

These costs included a stamp duty bill of about $70,000 from the purchase of a new house and a 12-month lease paid in advance by Forge.

"The administrators have been made aware of these claims," a spokesman for Ferrier Hodgson said.

"During the course of an administration, the administrators would normally investigate the affairs of the company to identify what has led to the company's financial predicament. The administrators have not yet conducted their investigation."

The claims come as a blow to the 1400 people sacked as a result of the company’s collapse last week who will not receive their final pay cheques or any entitlements.

Meanwhile, the size of Forges debt has risen to $700 million as a growing list of unsecured creditors make claims.

Forge has lost all but one of $1.5 billion worth of contracts since ANZ and other financiers withdrew support for the company.

Receivers KordaMentha and administrators Ferrier Hodgson have taken control of the company.

Administrators will host the first meeting for Forge creditors in Perth on Friday.

Newsletter sign-up

The latest products and news delivered to your inbox