Business collapse reveals untidy history

The liquidation of mining services outfit C&G Group Industries has revealed links between the Western Australian operation’s director, Christopher Skelly, and a messy business collapse in Christchurch New Zealand.

Heavy equipment hire group and C&G Group creditor, Queensland-based Orionstone, was behind the appointment of administrators Hall Chadwick and the business was subsequently put into liquidation in late May.

Hall Chadwick would not reveal what Orionstone was owed but it is understood C&G Group collapsed owing money to a number of other WA businesses.

The insolvency accountants would not comment on C&G Group except to say Hall Chadwick was undertaking an investigation and, once this was concluded, it would report to the Australian Securities and Investments Commission.

C&G Group, or CGGroup Mining and Civil as it is called on its website, is headquartered in serviced offices at 221 St Georges Terrace, Perth.

However, it’s understood the operation was active in regional WA, including in the mining hub of Kalgoorlie

It’s believed C&G Group leased heavy machinery from Orionstone, mainly to undertake earthworks, and its collapse has sparked discussion about its aggressive pricing strategy.

The C&G Group website lists a range of services, including mining earth works, civil and construction, and site rehabilitation.

The backstory to C&G Group’s demise is unclear but one Kalgoorlie local, who did not wish to be identified, said there were “ a lot of people hurting” over the collapse of the business.

“In an environment where people are desperate to increase sales and revenue, you take people on face value,” he said.

“A lot of people are really hurting over what has happened, it’s really disappointing but it’s life.”

The UK-born Mr Skelly did not return phone calls from Business News and the contact number on the C&G Group website was not answered, however, according to the serviced office operator Regus, Mr Skelly is still working out of his Perth office.

It appears this is not the first time Mr Skelly has been linked with a failed business.

Christchurch-based Skelly Holdings was put into liquidation in 2012.

It’s understood the business, the Canterbury Resource Recovery Centre, ran two dumps and charged contractors a landfill fee to dispose of waste following the Christchurch earthquakes.

However, press reports suggest Mr Skelly quit New Zealand over visa difficulties, leaving behind mountains of waste at these two city sites.

According to media reports from the time, the cost to remove this waste then fell to the property owners of the city dumps; but a number of businesses were also owed money, including the Christchurch City Council.

Mr Skelly’s history has raised questions among his Australian creditors and concerns that he was able to set up a new business despite his business experience in New Zealand.

In addition to C&G Group, Mr Skelly is listed as director of a number of other companies, including C&G Environmental Industries, C&G Group Holdings, C&G Group Mining and Civil and Red Rock Personnel.

The end of the mining construction boom has hit the mining services sector hard, and sharp falls in the iron ore price and oil price have only increased pressure on this once thriving industry.

Cost cutting has dominated the state’s once-unassailable resources sector for the past few years and fuelled speculation of likely corporate activity among the mining services operators.

Orionstone unveiled a proposal to merge or combine its business with Emeco in April, a move that would diversify its operation in terms of industry, commodity and client, according to Orionstone managing director Ashley Fraser.