Hastie Group folds - 500 NZ jobs at risk

Engineering company Hastie Group, which has gone into voluntary administration, was one of the big contractors for redeveloping Auckland Hospital. File photo / Dean Purcell

Insolvency specialists McGrathNicol have been appointed receivers to Australia's Hastie Group and its New Zealand holding company after the airconditioning specialist divulged a A$20 million ($26m) "accounting irregularity" on Friday.

Hastie designs, makes, installs and maintains air conditioning, fire alarm, plumbing, and commercial refrigeration systems and is a leader in its field in Australia.

The company employs around 2000 people, about 500 of them in New Zealand.

McGrathNicol has been appointed to Hastie in Australia and New Zealand and corporate reconstruction specialists PBB have been appointed voluntary administrators for the group.

In New Zealand, William Black and Andrew Grenfell of McGrathNicol have been appointed receivers of Hastie NZ.

Black told APNZ the receivership in New Zealand applied only to Hastie Holdings, and not its subsidiary companies, which are still operating under their own directors.

Hastie NZ was founded in 2001 after being awarded the contract to provide mechanical services installation at Auckland Hospital, which as at the time was one of the largest mechanical services projects in New Zealand's history.

The company has operations throughout New Zealand with major contracts in Auckland, Tauranga, Palmerston North, Wellington and Christchurch, as well as service branches in other parts of the country.

ASX-listed Hastie Group said on Friday that it had discovered accounting irregularities in respect of its services group.

Based on limited investigations, these accounting irregularities will give rise to a charge to profits for the current financial year in the order of A$20 million ($26m), the company said on Friday.

"These irregularities date from the financial year 2009 and appear to have resulted from the deliberate actions of a current employee (on suspension) and that potentially some current and former senior management may have participated in the irregularities and failed to apply the required standards of financial supervision and review," the company said.

In February, the company reported a A$150m first half loss.

Accounting irregularities in the order of A$3 million were discovered during the audit process for the half year, and were taken into account in the company's reported net loss for that period.

However, fresh information recently received prompted further investigations to be undertaken which resulted in the discovery of materially increased irregularities.

The company's auditors, Deloitte Touche Tohmatsu, have been asked to provide a report and to investigate the size and extent of the accounting irregularities. Hastie said it had also referred the matter to the Australian Securities and Investments Commission.

The ASX put the stock on a trading halt in mid-April, before suspending its shares indefinitely.

Just before their suspension, Hastie shares traded at A16c, down from a 12-month high of A$2.26 a share.