Former NBN subcontractor collapses

NBN subcontractor Qfibre has collapsed into liquidation less than a year after being dumped by Visionstream, owing millions to unsecured creditors along with $235,000 in unpaid employee entitlements.

Qfibre had won work as a subcontractor for Visionstream in Tasmania and Queensland, with a separate deal directly with NBN to help roll the network out across the Northern Territory.

The Queensland-based firm had been overseen by directors Jared Slade and Ivan Reginald Willey, with Mercatus Holdings used as a holding company for the firm.

A second company called Netcom Services Group, which is also insolvent, was used as part of the management structure for Qfibre.

Mounting trading losses eventually left the company insolvent, with Chris Cook and Morgan Lane of Worrells Solvency and Forensic Accountants appointed last month as liquidators.

Cook and Lane identified outstanding unpaid employee entitlements had ballooned out to $235,000, with the company holding just $6000 in assets, mostly in the form of indemnity funding.

According to one document filed with ASIC, creditors are claiming a total of $2.3 million from the collapsed company.

Alongside government agencies such as the Australian Taxation Office, WorkCover Queensland and the Office of State Revenue, the list of creditors includes Arnhemland Pest Control, Alta Cleaning Services, East Arnhem Real Estate, Kennards Hire, Middendorp Electric and Bunnings Powerpass.

Attempts by iTnews to contact Slade and Willey were unsuccessful.

What happened

Qfibre's troubles started in May last year, when it was dumped by Visionstream in Tasmania for alleged underperformance.

In October 2013, then-communications minister, Malcolm Turnbull, criticised Visionstream for allegedly slowing work on the national broadband network in Tasmania, due to issues with subcontractors and Telstra pit remediation work.

Visionstream's subsequent dumping of Qfibre left around 100 staff out of work, according to the Communications, Electrical and Plumbing Union.

Yet despite the situation in Tasmania, Qfibre continued work on the NBN rollout in both Queensland and the Northern Territory.

To cut costs, the Communications Workers Union alleged that employees on 457 visas were told it was their responsibility to renew their visas through a particular immigration agent – at their own expense.

iTnews also understands that in some cases workers from the Tasmanian build were allegedly asked to relocate interstate at their own expense in order to continue working for the company.

According to a report in the NT News, two employees who had been relocated by Qfibre to the NT were asked to take redundancy after complaining about the conditions at their accommodation.

But the alleged cost-cutting efforts were unsuccessful, with the company winding up late last month, just shy of its three-year anniversary.

Know more? Email asadauskas@itnews.com.au.