Sir Bob Parker, left, and Bert Govan.
Christchurch-based Challenge Steel has been placed into voluntary liquidation one year after it was launched by businessman Bert Govan.
Govan has held meetings with liquidator BDO and the clients and creditors understood to be owed several million dollars, apologising for the failure.
Other Challenge Steel directors – Tony Sewell, Geoffrey Cranko and Annie Govan – resigned two weeks ago, leaving 75 per cent shareholder Govan and 25 per cent owner and chief executive Suresh Nagaiya on the board.
Southbase says the steel used in the central Christchurch library is top quality and certified.
The steel had been used by Southbase as head contractor for the $70 million Health Research Education Building on Oxford Tce, which would be leased to the Canterbury District Health Board.
The development company for the research building is New Urban Group, where Govan is an executive partner along with Sir Bob Parker, director John Fairhall, and Wang Jianping and Nancy Chu, who represent Chinese backers.
Parker said there were no material implications for the project.
The steel was also used by Southbase in the half-constructed Christchurch library building on Gloucester St, and in John Fairhall's MedCar building at 259 Antigua St.
It has also been used in two Auckland projects, including one at Alexander Park
"The quality is great and the service from Southbase has been great. We've been talking with Bert and the liquidators and want to ensure no local firms are out of pocket," Henderson said.
Sources said Challenge Steel's problems may have arisen from penalty payments after incorrect steel was imported for some bracing elements in the Novotel hotel at Christchurch International Airport, developed by Fletcher Construction.
Govan said the decision to place Challenge Steel into voluntary liquidation was extremely difficult and one of the hardest decisions he had needed to make."The understanding of the suppliers and customers that has been shown since Monday has been humbling and appreciated," he said."We have other business and community interests and the understanding in those organisations has also been very much appreciated."It was important to us that we told staff and as many people as possible as we wanted to front up and to also personally apologise for this being the only responsible path forward."Govan said Challenge Steel was a "small company with potentially a big future". "It has felt like a David and Goliath battle at times trying to break into the highly competitive construction sector."There will be debate and discussion about the reasons for the liquidation but today is not the day."He said he would be disappointed if the company's liquidation spelled the end of greater competition in the supply chain for New Zealand's construction and infrastructure industries."We want to say how sorry we are for this situation," Govan said.The company entered the market in 2016 promising to reduce prices in the construction sector. Govan and other directors made several visits to China with clients, contractors and engineers to show them the manufacturing and auditing processes for the steel.
