One of Asia Pacific’s largest joinery, cabinet, and panelling manufacturers has been reported to ASIC in what is shaping up to be Australia’s largest and most complicated corporate collapse for 2024.
As reported by News Corporation this morning, GDK Group now owes “at least” AU $78 million across 12 different companies. That amount is expected to balloon further, with liquidators involved reporting that debts are already spiralling as more information comes to light.
For more than 30 years, GDK Group, which generated more than AU $40 million per year, has serviced the lucrative acoustic, wall, ceiling, flooring, and toilet partition system market. However, liquidators working on the collapse have uncovered hidden debts that are multiplying by the day.
At its peak, GDK Group worked with several of Australia’s most respected suppliers, including The Laminex Group, Polytec, and Gunnersons, who “ensured that (GDK) is the recipient of the best quality, and in most cases, the first batch of timbers, veneers and hardware goods.”
It is unknown what impact the collapse will have on these businesses – with News reporting that GDK Group’s 100-strong labour force was “brutally sacked just before Christmas”, including its in-house engineers, architects, designers, machinists, polishers, assemblers, partitioners and installation crews.
Over the past decade, the company has been aggressively expanding into Asian markets, with the GDK Group website reporting that “the coming decade represented the next stage of GDK’s national and international growth,” with investments into Southeast and Northern Asian markets.
Wood Central understands that many of these companies had obscure Lord of the Rings references, which “confused” staff and left them unaware that some companies were still operating. These included Himlad, Hithlum, Thargeliou, Belegaer, Ossiriand, Nevrast, Dorlomin, and Avernien. At least one staff member owed more than $25,000 in unpaid entitlements.
According to News, the company had several high-profile jobs with well-known companies, including supplying acoustic panelling to Canberra’s law courts, Sydney Dance Company, and the Lyric Theatre and panelling to the NRMA’s head office and Huawei’s offices in Sydney.
In addition, it also had national “joint venture” programmes with the Commonwealth Bank and DORMA Moveable Walls, which saw the company supply interior fit-out and shopfitting services across almost 2,000 Commonwealth Bank branded branches Australia-wide.
Liquidators from the insolvency firm RSM Australia have been involved with the collapsed company since July last year. News reports that debts have exploded three times beyond the original estimates since Christmas, with 50 staff still owed money from unpaid entitlements.
Tristana Steedman, a spokesperson from RSM Australia, has referred the current and former business directors to the corporate regulator, ASIC, for failing to comply with demands.
In a report lodged to ASIC this month, Ms Steedman wrote that we “do not have a current list of all the companies’ assets” and that “this has impeded our investigations and ability to identify any potential unencumbered assets for realisation or recoveries.”
Before adding that “failure to provide this information is an offence under the Corporations Act 2001,” before observing that “the companies appeared to have been trading insolvent since at least July last year.”
“As a result, the current and former company directors could potentially face recovery actions for up to $5 million resulting from insolvent trading,” Ms Steedman said.
“However, additional funding would need to be secured from creditors, ASIC or a litigation funder to continue investigations into these potential recoveries and any other breaches of the Act.”
Nicholas Kalikajaros and Nikolas Simic, the current and former directors, respectively, linked to the companies, did not respond to requests for comment after the Federal Court forcibly instructed the Tax Office to wind up all businesses after Himlad Pty Ltd, linked to the GDK Group of companies, went into voluntary liquidation in May last year.
The collapse as it happened
In May, Himlad Pty Ltd, linked to the GDK Group of companies, went into voluntary liquidation with debts amounting to AU $29.8 million, according to a statutory report filed with the corporate regulator.
Although the liquidator of Himlad, Daniel Quinn, did not respond to requests for comment, his report to ASIC indicated that staff were owed $2.1 million, including $885,000 in unpaid superannuation, with all workers payroll and entitlements switching over to Joinery Manufacturing Solutions Pty Ltd.
Since then, the tax office has forcibly wound up multiple other companies in the Federal Court.
In July, three other companies went into voluntary liquidation – Nevrast Pty Ltd, formerly trading as Imprint Furniture; Dorlomin, formerly trading as Imprint Systems; and Avernien Pty Ltd, formerly trading as GDK Ventures. Liquidation reports say these companies were part of the GDK Group.
At the end of November, the Federal Court ordered two more companies to go belly up, and Henry McKenna of insolvency firm Vincents was nominated as the liquidator.
In early December, Ossiriand Pty Ltd was ordered to go into liquidation before another slew of businesses collapsed several days later – including GDK Group Pty Ltd, Belegaer Pty Ltd, GDK Projects Pty Ltd and GDK Holdings.
