A glamorous couple flaunted their lavish lifestyle before their construction company suddenly collapsed and some contractors claimed they were still owed money.
The Perth-based company Modco Residential of Cynthia Lu and Yusuf Khan announced it had entered voluntary administration on Monday.
The organization launched in 2020 with an exclusive VIP party attended by Perth’s A-list supercar driver, before collapsing just three years later.
Modco Residential director Damien Clancy issued an emotional letter blaming industry challenges and the media for the company’s downfall.
The shocking news comes as some contractors claim they are still waiting to get paid their six-figure invoices with complaints dating back to April 2022.
Ms. Lu’s Instagram account is replete with photos showing her and her partner’s glamorous lifestyle, with the couple posing in front of luxury cars and flying business class on flights.
Perth-based Modco Residential, founded by glamorous couple Cynthia Lu and Yusuf Khan (pictured), went into voluntary administration on Monday
Launched in late 2021, an exclusive VIP party attended by WA’s A-list (pictured)
“Despite our efforts to overcome expected adversities in building a growing business, rapid and unforeseen external challenges ranging from unprecedented industry challenges, perpetuated by a series of controversial articles that sparked mistrust among stakeholders, became an insurmountable challenge,” Mr. Clancy’s statement read.
“What initially began as a nationwide industry challenge of rising material and labor costs and a shortage of skilled trades that forced many builders into administration in the last fiscal year, was later exacerbated by intense media scrutiny directed at Modco Residential, leading to mistrust among our trades, vendors, staff, shareholders, customers, and industry insurer QBE.
“This caused significant strain on business operations and made it exceptionally difficult for us to acquire qualified merchants, retain staff, and continue our operations.”
Mr. Clancy announced that the company had appointed administrators to GTS Advisory and apologized that the company was unable to meet its commitments.
But he stopped short of taking any responsibility for the company’s collapse.
“At this time of deep sadness for all those affected, we hope that the closure of Modco will be a catalyst in highlighting the need for systemic change and industry support to address the problems that persist in the construction sector,” the letter added.
‘The administrator, GTS Advisory will be in contact with all interested parties.
‘In the face of adversity, we say goodbye with a heavy heart.’
Daily Mail Australia contacted Modco Residential for comment.
It was revealed on May 20 this year that the company was being evicted from its Osborne Park headquarters after failing to pay rent for four to five months, according to The West Australian newspaper.
Modco Residential was founded in August 2020 and is committed to building affordable homes in a short 20 week period.
The company was being evicted from its Osborne Park headquarters after it was reportedly late on rent. western australia informed.
The company had reportedly been in trouble for over a year.
The firm’s director partly blamed the media for its collapse, telling investors and creditors that “it is with a heavy heart that we say goodbye.”
Several disgruntled customers have taken the company to court with up to four disputes before the State Administrative Court.
Building and Energy has also claimed that several complaints from owners and contractors have been filed.
Mr. Khan has a background in development and construction and is a director of the private equity firm Perth City Investments Pty Ltd.
He has described Cynthia as his ‘life partner’ and ‘right-hand man’, who oversees legal matters, marketing and advertising for his various business ventures.
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 line of Australian construction companies to go under.
Construction companies are still reeling from the impacts of the Covid pandemic with additional global shortages of timber and building materials due to blocked supply chains affected by the Russia-Ukraine conflict.
This has led to the cost of materials increasing by more than 20 percent since the beginning of 2022, with some items rising even higher.
Pine lumber more than doubled in price, while reinforcing steel, glass, sheetrock, fiber cement and other materials also skyrocketed.
Such price increases meant that many fixed-contract construction projects were no longer viable.
Across Australia, failed businesses owe hundreds of millions of dollars to subcontractors, merchants, customers and the tax office.