One of the Hawke's Bay franchises of Signature Homes has gone into liquidation after allegations of theft and fraud. Signature Homes chief executive Phillip Howe said the five Signature Homes Hawke's Bay (SHHB) homes under construction would be completed under the terms of Signature Homes' Home Completion Guarantee.
He said hiscompany regretted the franchise failure.
"While significant management resource has been provided to SHHB over the last year or so and hundreds of thousands of dollars put into the business, the continuing depressed housing market makes it too difficult for SHHB to be able to trade its way out of the situation it is in," he said.
The owner of Clive-based SHHB was also Signature Homes Ltd owner Gavin Hunt, who took over the franchise when it ran into difficulty five years ago.
"My wife and I spent hundred of thousands of our own money to pay off subbies and show our commitment to the region," Mr Hunt said.
Mr Howe alleged a large amount of theft and fraud had come to light recently and an investigation was continuing. "This has played a major role in the current situation the business finds itself in, sucking out several tens of thousands of dollars of funds at a time when the financial health of the business was in reasonable shape," he said. "In hindsight, this was the catalyst for the downhill slide that eventuated.
"These funds being taken from the business, along with the record-low state of the housing market, has made it very difficult for the business to re-gather some momentum and trade its way back."
The Auckland firm of Meltzer Mason Heath had been appointed to manage creditors and oversee clients' homes under construction.
Liquidator Lloyd Hayward said he was in a position to recover creditors' funds and would not say if charges had been laid or what was owing. The other Hawke's Bay Signature Homes franchisee, Frimley Homes, is not related to SHHB and continues to operate successfully.
Only 23 consents for new homes were issued in April for Hawke's Bay, down from 80 at the same time last year. The value of April's 23 consents was $6 million, compared with $18 million for April 2010.
