(Source: www.straitstimes.com)

At least five subcontractors have claimed that they are collectively owed around $1 million by a main contractor, Li Jie Construction, in unpaid fees for seven projects.

These include upgrading works for the Housing Board (HDB) and a town council.

The subcontractors told The Sunday Times they had been unable to contact Li Jie’s management since the start of this month.

A former site manager told ST he left the local firm about a month ago, and it was no longer in operation.

One subcontractor, Lian Huah Engineering, made a successful adjudication application with the Building and Construction Industry Security of Payment (SOP) Act, obtaining a ruling that Li Jie should pay it over $290,000 for work done.

The Act was enacted to give contractors and subcontractors a quick way to resolve payment disputes. Cases are administered by the Singapore Mediation Centre.

But the amount does not include retention fees and fees for another town council project, amounting to over $150,000, said Mr William Goh, managing director of MA Electrical Services, which carried out the work for Li Jie on behalf of Lian Huah.

“We still owe some of our management staff about a month’s salary, and some of our suppliers, three to four months of payment,” said Mr Goh, who made a police report on Friday. Police said they were looking into the matter.

The other firms, which include Lovely Landscape and Construction, Calvary Carpentry, and Bonco Enterprise, said that while they had received some payment, they are still owed between $20,000 and more than $169,000.

Works, in areas including Bedok and Woodlands, were done from as early as May last year, said the firms.

“Then director Joel Yang first told us that HDB had not released payment to the company, and so he could not pay us,” said Calvary Carpentry director Ruben Chong, whose company is owed over $20,000. He engaged debt collector KX-Unit in July.

“When we probed further, he said that cheques for payment had been prepared, but he had no authority to issue them, and he was further prevented due to conflict among the shareholders,” he added.

An HDB spokesman said it has “made prompt and full payment” to Li Jie for the upgrading works. “There is currently no outstanding payment due to Li Jie,” she said, noting that the upgrading works were on track for completion.

A steel contractor’s managing director, who wanted to be known only as Mr Ong, said his firm is owed over $280,000.

He said: “It is the third time a main contractor has done this to us. One went bust, and the other one voluntarily liquidated”

When ST visited Li Jie’s Bukit Batok office, its shutters were down and no one came to the door. An employee from next door said he last saw its owners about a week ago.

Li Jie’s current registered director, Mr Dai Jianfa, was not at his previous registered address in Woodlands. A neighbour said he had not seen anyone in the HDB flat in three weeks.

A Li Jie shareholder also claimed to know nothing of the alleged conflict among shareholders, or of the company’s operations.

Mr Joel Yang, the director named by one of the subcontractors, has stepped down and is now a shareholder, of whom there are eight.

“Legally, the quickest way for subcontractors to try and recover the money is by taking out an adjudication application under the SOP Act,” said TSMP lawyer Melvin Chan. If the other party does not pay despite being told to do so, the decision can be enforced as a court order.

“But practically, if the contractor has no money or assets, or is effectively insolvent, there’s not much the subcontractors can do to recover the funds,” said Mr Chan.

Mr Ken Jung, vice-president of the Singapore Electrical Contractors and Licensed Electrical Workers Association, said such issues are “not new” for subcontractors.

“Smaller firms could stop work, but they may be held liable for doing so,” he said. “While they can seek legal recourse, they might not have time or money… and may not want to antagonise the main contractor, to maintain a good working relationship.”

More Info: www.straitstimes.com

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