One rule for the unions, another for business. While Nine Entertainment mastheads have been battering the CFMEU, when it comes to similar practices by developers, they look the other way. Marcus Reubenstein with the story.
The CFMEU construction division is smouldering in administration following reports of links to organised crime aired by Nine Entertainment. But for years, property developers have been burning themselves to the ground, rising from liquidations, often back into the hands of the original developer. One developer, with liquidations in its past, is heading up a $500m project in Wollongong linked to Nine Entertainment’s biggest shareholder.
The Wollongong city skyline, south of Sydney, is set to undergo a major transformation with plans before the city council for a three-tower mixed commercial and residential development, the tallest of which is planned to be 39 stories. Valued at $500m, the WIN Grand mixed-use precinct is the biggest ever development in Wollongong.
The site was purchased for $70m by a company called Level 33, which has completed a number of developments in Wollongong and Sydney’s south. The vendor was Birketu Pty Ltd, owned by Bermuda-based billionaire media tycoon Bruce Gordon, who is the single biggest shareholder in Nine Entertainment.
While the Nine mastheads reported on the transaction, there was hardly a deep dive into Level 33, rather a warm and fuzzy reference to it as a “family-owned company” with a solid track record in Sydney and the Illawarra region.
The Sydney Morning Herald reported that Birketu, which was heavily involved in the planning phase, will maintain an interest in WIN Grand, quoting Birketu and WIN chief executive Andrew Lancaster, saying, “We will take a large part of the commercial aspect of the site when it is completed.”
Lancaster was reported as saying Level 33 was selected from a field of 20 developers who lodged expressions of interest to buy the site and that “Level 33 are experts at residential and mixed-use commercial development, and we are pleased they share our vision for the site.”
While Nine Newspapers did disclose the largest shareholder of its parent company was the vendor, which will continue to have involvement in the development, there was scant attention paid to the track record of the purchaser.
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Mainstream media look the other way
Just like the CFMEU, the directors of Level 33 and its associated companies are no strangers when it comes to having the corporate undertakers knocking on their doors. That didn’t rate a mention in Nine’s reports.
Contrast this to the hiding Nine gave the CFMEU. Since the announcement in July that the administrators were heading off to the CFMEU, the Sydney Morning Herald and The Age have filed more than 90 stories about the union, with the AFR chiming in with another 60 connected to their “Building Bad” investigations.
An ASIC search shows there are at least 19 different entities with variations of the company name “Level 33” with nine cancelled and one under external administration. The registered address of what appears to be the group’s parent company, Level 33 Construction Pty Ltd, is PricewaterhouseCoopers Group 2 in Sydney.
Eddy Haddad, who delivered glowing quotes to Nine Newspapers on the Wollongong deal, is the sole director of Level 33 Construction Pty Ltd.
A consultant who’d worked for Level 33 in 2023 was hardly complementary, telling MWM, “Level 33 doesn’t pay its bills”, but added, “that’s nothing unusual in the property industry.”
One of its previous associated companies is North Shore Property Developments Pty Ltd, of which Haddad’s brother John was the sole director. North Shore Property Developments was first registered as a company in March 2010 as Level 33 Pty Ltd, changing its name in 2012.
The company was wound up in 2015, but not before Eddy Haddad picked up four apartments in a development in the affluent Sydney suburb of Lane Cove for $1.62m. That was in 2014. Haddad undertook renovation works and, just before the liquidators arrived, sold the apartments and two garage spaces for a total of $4.069m.
The company having gone into administration, leaving the Australian Taxation Office to stand in line, claiming it was owed $5.8m.
In Federal Court proceedings brought by the ATO, it was revealed another two units in the Lane Cove development were sold for $800,000 to the wife of a plumber who’d worked on the project. However, the court found “no consideration for the transfers was provided, and no money was paid.” That transaction was completed just four months before the liquidators were called in.
Developers rising from the ashes
Phoenix activity is the process of liquidating a company to escape debts, particularly employees’ wages and payments to subcontractors and to the ATO, with the directors then rising from the ashes with a new company after transferring any useful assets out of the liquidated entity.
A 2018 PwC report estimated phoenix activity was costing Australia’s economy up to $5B per year, with ASIC and the ATO reporting an estimated $1.6B lost in unpaid taxes. The ATO, ASIC, and the Australian National Audit Office are all grappling with the practice.
The ATO has set up a Phoenix Taskforce, nabbing one property developer that wound up companies six times in five years, leaving behind $160m in unpaid debts.
As for the Deed of Settlement in the winding up of the John Haddad-controlled North Shore Property Developments that was negotiated by disgraced liquidator David Iannuzzi. In 2019, the Federal Court handed Iannuzzi a 10-year ban as a liquidator. The ATO labelled him “a phoenix enabling liquidator”. The court investigated 23 companies liquidated by Iannuzzi, all of them clients of Banq Accountants and Advisors Pty Ltd, an accounting firm in the southwestern Sydney suburb of Punchbowl.
Evidence before the court revealed that for most of the life of the Haddad-controlled North Shore Property Developments, its registered address was that of Banq Accountants and Advisors.
An investigation by The Guardian reported the ATO estimated Banq liquidated at least 120 companies that had monies owed to the taxation office, potentially as much as $165m. That same investigation alleged that among Banq’s clients were individuals with connections to the Comanchero bikie gang.
With big money involved in construction and development, it’s not just corrupt unionists holding out their hands. While Nine Entertainment relentlessly went after the CFMEU, it’s given the kid glove treatment to a transaction involving its major shareholder and a developer with a corporate history that hardly aligns with Nine’s characterisation of it as a “family-owned company”.
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This post was originally published on Michael West.