A glamorous couple flaunted their lavish lifestyle before their building firm suddenly collapsed with some contractors claiming they are still owed money.
Cynthia Lu and Yusuf Khan’s Perth-based company Modco Residential announced it had entered voluntary administration on Monday.
The organization was launched in 2020 with an exclusive VIP party that was attended by Perth’s supercar driving A-list – before cratering just three years later.
Modco Residential director Damien Clancy issued an emotional letter blaming industry challenges and the media for the downfall of the firm.
The shock news comes as some contractors claim they are still waiting to be paid their six figure bills with complaints going back as early as April 2022.
Ms Lu’s Instagram account is packed with photos showing off her and her partner’s glamorous lifestyle – with the couple posing in front of luxury cars and flying in business class on flights.
Modco Residential, based in Perth and founded by glamor couple Cynthia Lu and Yusuf Khan (pictured), entered voluntary administration on Monday.
It was launched in late 2021 an exclusive VIP party attended by WA’s A-list (pictured)
‘Despite our efforts to overcome adversities expected in building a growing business, the rapid and unforeseen external challenges ranging from unprecedented industry challenges, perpetuated by a series of controversial articles that created distrust amongst stakeholders became an insurmountable challenge,’ Mr Clancy’s statement reads.
‘What initially started as a nationwide industry challenge of increased costs of materials and labor and shortage of skilled trade forcing many builders into administration in the past financial year, was then exacerbated by the intense media scrutiny targeting Modco Residential creating distrust amongst our trades, vendors, staff, shareholders, clients and the industry insurer QBE.
‘This caused significant strain on business operations and made it exceptionally challenging for us to acquire skilled tradespeople, retain staff and continue our operations.’
Mr Clancy announced the firm had appointed administrators GTS Advisory and apologized that the firm could not meet its commitments.
But he stopped short of taking any responsibility for the company’s collapse.
‘In this moment of profound sadness for all that have been affected, we hope the close of Modco will be a catalyst to highlight the need for systemic change and industry support to address the issues that persist within the construction sector,’ the letter adds.
The administrator, GTS Advisory will be in contact with all stakeholders.
‘In the face of adversity, we say goodbye with heavy hearts.’
Daily Mail Australia contacted Modco Residential for comment.
On May 20 this year it was revealed the company was being evicted from its Osborne Park headquarters after not paying rent for four to five months, according to The West Australian newspaper.
Modco Residential was founded in August 2020 and vowed to build cost-effective homes within a short 20-week period.
The company was being evicted from its Osborne Park headquarters after reportedly falling behind on its rent, The West Australian reported.
The firm had reportedly been in trouble for over a year
The firm’s director partly blamed the media for its collapse, telling investors and creditors ‘we say goodbye with heavy hearts’
Several disgruntled clients have taken the company to court with as many as four disputes before the State Administrative Tribunal.
Building and Energy has also claimed several complaints have been made from homeowners and contractors.
Mr Khan has a background in development and construction and is director of private equity firm Perth City Investments Pty Ltd.
He has described Cynthia as his ‘life partner’ and ‘right hand’, who checks over legals, marketing and advertising for his various business enterprises.
The couple also run The Library Nightclub in Perth, which they bought for $4.6 million in 2017.
Modco Residential is the latest in a long list of Australian building firms to go under.
Construction companies are still reeling from the impacts of the Covid pandemic with an added global lack of timber and building materials due to choked supply chains impacted by the Russia-Ukraine conflict.
This has led to the cost of materials rising by more than 20 percent since the start of 2022, with some items rising by even more.
Pine wood more than doubled in price, while reinforcing steel, glass, plasterboard, fiber cement and other materials also skyrocketed.
Such price rises meant many fixed contract building projects were no longer viable.
Across Australia, hundreds of millions of dollars are owed by failed companies to subcontractors, tradesmen, clients and the tax office.
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