I’ll be quite agitated if the govt now gives a bailout to any of the mainzeal suppliers / employees.

It was mentioned on One News .

Some of the comments on one news last night were nothing short of reprehensible. Rodger Sutton for one should not have been quoted as saying that Vero needed another partner, when they do not (it’s a completely seperate company).

Lol…wish we used that logic before Cullen and English were appointed.

According to the news Shipley, Collins and Tilby bailed from their Directorship of Mainzeal Construction (the building subsiduary), back in December. Their statement says they were asked to leave.

I read the business news in at least 3 places most days and I cannot recall anywhere seeing that news.

One would think thathad an incling of that news made the reports anywhere the danger signs would have been apparent.
reading the creditors comments says that’s about when payments stopped. So they bailed knowing that there was every likely hood that this was going to happen.
Next question. Who knew about this state of affairs?

Next Question, Seems Mr Jan must be close to recklessly trading. Is the FMA going to look at the actions of the company?
Next Question. Have they remove his passport? If not why Not.

Some big dosh owed around the place.

Another interesting Question.
How did Smith know about this that he was able to retreive his gear from the ChCH sites on Waitangi Day? The same day that the receivership was announced and before the receivers had time to control the sites?

(Don’t blame him for being quick, but seems no one was quick enough, so one is left wondering and pondering what came across the grapevine.)
Lots of National Party connections.Chinese walls and all that.

It was mentioned on One News .

This is almost certainly a Richina screw up.

Richina was propping up the subsidiary it is becoming clear – they decided it was not recoverable financially and pulled the plug – I would not be surprised if they did the usual tricks around preferential debt to screw over other debtors but they do also appear to have stuck a chunk of money in to the subsidiary so at first glance appear to have behaved decently by construction company standards.

I have no time for Shipley, by the way, but prefer to let facts rather than personal dislike colour my opinions.

“Why are people blaming the govt for this? Did they enforce crappy design by law? Did they ban good practice?”

Yes, my understanding is that changes in Government standards were a contributing factor:

They *relaxed* the rules. They did not force people to build leaky and to use untreated framing.

I built during the time the rules were relaxed, and so did friends and family. We had lengthy discussions on materials and costs and “Minimum required by regulation” was never the principal design requirement. Our builder had a very solid understanding of how to build a home – and I’m sure he could have built just as well in the absence of any regulation.

And there lies the problem: a lack of professionals in the building industry, and instead a bunch of cowboys trying to defraud their customers and do the minimum to get past council inspectors. If Mainzeal were a part of that then good riddance to them.

Even if you take the view that “more government regulation” is the solution – the fault for poor quality lies squarely with the builders.

I’d be ashamed to be a builder if I relied on council inspectors to set the minimum standard for my work.

Why are people blaming the govt for this? Did they enforce crappy design by law? Did they ban good practice?

Yes, my understanding is that changes in Government standards were a contributing factor:

There are many reasons that some buildings from the 1990s were leaky. One cause that resulted in more significant damage from the leaks, was the change to the New Zealand Standard for Timber Treatment, allowing the use of untreated Pinus Radiata timber for wall framing. As this timber has little natural resistance to rot when wet, damage occurs more quickly. Details that relied on a thin paint membrane over thin plaster to exclude moisture were common for many cladding systems, and fine cracks that appeared insignificant, and would have been relatively insignificant in solid structures, allowed continuous ingress of moisture into the framing. These causess, combined with the reduced air movement through the prevalence of sheet cladding or sheet insulating materials for the monolithic look cladding, resulted in very damp conditions which are ideal for rot.

Two government-funded agencies (including the Building Research Association of New Zealand) also approved the use of cheap monolithic claddings over this time.

I am reasonably confident it is all still owned by Richina.

As much as I’m not convinced about putting politicians on commercial boards (unless they’re from the commercial world originally and were successful), I don’t think Shipley or any of the independent directors would have had a lot of say in how the company is really ran when the key representative of the shareholder is on the board and pretty much runs the companies. As not a publicly listed company their powers are surprisingly small. They can end up with a chunk of exposure though thus their current running for cover …

Tendering for commercial work has been very competitive for the last 5 years, with the major firms cutting their margins, sometimes buying the work. Mainzeal is just the victim of the recession, and could only hold out for so long.

Shipley is living proof that someone who couldnt pass School Certificate should never be allowed near anything that involves the using of ones brain……

As for leaky buildings. Yes anyone stupid enough to buy a leaky building deserves what they get (ie: anything with a flat roof, with balconies supported by wood that goes thru the walls and most importantly a roof without an overhang. But behind it all was The BSI who approved all these shonky methods and materials (and i have little doubt that some approvals were as a result of co-coercion in the form of money or goods in lieu of……..- ie: backhanders)

Currently 70% of Mainzeal’s business comes from projects where we are engaged early to work collaboratively with the consultants to ensure delivery of the client’s objectives.

So if a lot of their stuff is design & build, that would certainly offer one possible explanation for how they’re in the firing line for leaky buildings… perhaps they were the designer!

How on earth are Mainzeal another victim of leaky homes?

Presumably they cut corners with weatherproofing design and materials and ended up paying dearly for that. They made non-leaky buildings in the past.

Why are people blaming the govt for this? Did they enforce crappy design by law? Did they ban good practice?

Thought exercise: If the govt removes the speed limit on a safe stretch of road and someone dies driving at 200km/h in heavy rain then who is to blame? The govt, NIWA, the car manufacturer, or the nut behind the wheel?

I haven’t done much on Mainzeal jobs, but the way they ran their sites seemed very good, almost as good as big Fletchers sites. You certainly never worried that you were going to get showered in welding sparks, or shot with a nail gun, or fall down a hole when you turned up at a Mainzeal site with your clipboard and squeaky-clean hi-viz from the office cupboard.

As you say hopefully the current projects will be bought up by someone, and continue with as many of the same subbies as possible.

It was owned by Richina Pacific, on which Jenny Shipley was once a director. Richina Pacific delisted from the stock exchange, and Richard Yan, the driving force behind Richina, eventually bought out other shareholders.

Yan’s family are said to have got him out of Maoist China to study in NZ then the US thanks to family links with Chou En-lai,who had a background in the Chinese aristocracy.

The fact that all the independent directors are walking implies they were pushed or decided they did not want to be associated with the potential exposure (financial or reputational).

At least Richina is private as it had a history of poor treatment of smaller investors until it was delisted.

Check out all the other construction companies you can think off bar Fletcher Construction and Hawkins here http://www.business.govt.nz/companies

All the other construction companies have shut their old companies down (pre leaky building era) and started new ones with very similar names

In November 2009, national government decided not to offer a more substantial sharing of costs, and it is now estimated that in most cases, around 64% would have to be borne by the owners, 26% by Councils, and only 10% by national government funds, while also forcing homeowners to sign away their rights to sue for more.
Prime Minister John Key noted that while claimants did not have to accept the settlement, legal costs for bringing suit could eat up any further money awarded to them… The governments position was assailed by mayors of affected Councils and by pundits, who noted that paying only 10%, and then receiving 12.5% back in goods and services tax, the government was actually making money from the crisis.

The builder only bears the cost of a leaky home if it is negligent or in breach of contract. Sure, it is the “lastmanstanding” but that only means that there is no spread or rights of contribution. It doesn’t mean that the builder is the indemnifier for everyone else’s mistake.

That being the case, why is a builder a victim?