Illustration: Kerrie Leishman

It seems the smaller you are, the less significant in a national economic sense, the more likely it is you will comply with the corporations laws.

Following revelations this month that compliance in company reporting by mining billionaires and multinationals with large government contracts is a shambles, an investigation of large proprietary companies in the construction sector has found compliance is better, though still far from perfect.

Whereas some of the big multinationals and billionaires don’t bother filing accounts at all, leading east coast builders – and bear in mind this is a sector under pressure – display a compliance of 69 per cent when it comes to filing their annual accounts on time.

This was based on an analysis of 26 builders that was published online yesterday. Of that number, 18 were compliant. We are talking about the likes of Grocon, Leighton Holdings, John Holland, Thiess, Abigroup and so forth.

Compliance of just 69 per cent, you might say, sounds derelict. And you might be right but it’s a good deal better than the likes of detention centre operator Serco, prison operators Australian Correctional Facilities and G4S Custodial Services, lottery provider Intralot Australia, and the three multinational water contractors United Water International, Veolia Water and Suez Environnement.

Not to mention Clive Palmer’s flagships Mineralogy and Resourcehouse (no accounts at all) or Gina Rinehart’s Hancock Prospecting (last two years of accounts missing).

The other pattern that emerges, drilling down into both the reporting and the performance of the building companies, is that poor reporting is likely to foreshadow poor performance.

The message then for regulators, a message they are apparently not hearing, is that if there was half-decent regulation in this area, or even basic enforcement of the existing laws, staff and creditors could be far better protected.

Further, proper enforcement of the laws could provide early warning and therefore potential remedy for financial disasters.

Last month, the venerable NSW construction company Kell & Rigby hit the wall after a century in business. There are two obvious points to draw from this collapse: one, things are tough in the east coast building industry and, two, it’s a disaster for the company’s staff and creditors who are owed about $4 million and $16 million respectively.

Those who have lost can rightly ask why Kell & Rigby had not filed its financial reports since 2009.

It may be entirely academic now but had creditors had the chance to see public information that indicated financial stress, they might also have had the chance to bail out early – to call in a debt or look for another job.

Again yesterday, BusinessDay put questions to the Australian Securities and Investments Commission, the body that is supposed to enforce regulation and reporting.

Having been stonewalled over the past two weeks when asking what was being done about the failure of the big proprietary companies to comply with the Corporations Act, our expectations were low; lower than a Leighton Holdings executive pay hurdle.

And the relevant authority did not disappoint.

“ASIC does not comment on operational matters so I can’t provide any further information on the matters you’ve raised,” a spokesperson said.

Just analysing that response for a moment, a response that we should add took many hours to arrive, it seems a mite illusory. The words “further information” denote there was in fact some or any information provided at an earlier point in time. There wasn’t.

But the real gold in a public relations sense was the courteous refusal to “comment on operational matters”. This has a touch of MI5 about it. There is a little James Bond in the words “operational matters”. The statement is designed to convey the image that there is something going on, something dynamic afoot.

If in fact there is something going on, apart from non-operational matters, it is clearly a furtive operation and one that has only just begun, as the watchdog has been rudely awoken from its deep enforcement slumber.

Of the 26 big players looked at in the construction industry, 18 lodged their annual accounts within four months of the end of the year, in compliance with the law.

There appears to be a nexus between delays in reporting and financial stress. This is evinced by Kell & Rigby and Reed Constructions. The ASIC database shows the latest accounts for Kell & Rigby Holdings Pty Ltd (under external administration since February) are for 2009. Accounts for 2008, 2010 and last year do not appear to have been lodged at all.

Another construction company, McConnell Dowell, has just lodged late, and York Civil is yet to file for the last financial year. Five other companies – J. Hutchinson, Laing O’Rourke, Reed, St Hilliers and Thiess – filed their reports for last year after the statutory deadline.

Reed Constructions is both a late filer and a beneficiary of large government contracts via the schools program. Earlier this month, the company lodged its 2010-11 accounts four months late.

Finally, as an aside, Keane Australia Pty Ltd, a related company of Keane Australia Micropayment Consortium Pty Ltd, which operates Melbourne’s new Myki smartcard transport ticketing system, has just lodged six years (2005 through 2010) of financial reports on the same day, all of which were well overdue, and one six years overdue!