Tech company D365 Group collapses into liquidation after Federal Court hearing

An Australian technology company that has been bleeding staff for the past two years and has been unable to complete projects for customers has finally collapsed.

News.com.au can reveal that on Friday, the Federal Court ordered D365 Group to go into liquidation.

The Deputy Commissioner of Taxation began winding up proceedings against the company in late September due to unpaid superannuation to staff spanning back years.

Less than two weeks later, D365 Group was ordered to shut down.

Letters of demand went unanswered and news.com.au understands no company representative attended the final directions hearing on Friday.

William Honner and Andrew Scott of the insolvency arm of accounting firm PwC are the appointed liquidators and a spokesperson told news.com.au they are encouraging all creditors to get in touch with their firm. They said investigations are too preliminary to indicate the company’s liabilities.

D365 Group, which built software for health, real estate and accounting services with offices in Sydney and Melbourne, had been the subject of several news.com.au investigations after disgruntled staff and customers came forward.

Half of D365 Group’s staff had quit the firm in the space of a year because their superannuation went unpaid for months, and many were not paid their final wages.

This led to one staff member sending a sensational company-wide email advising everyone to “get out while you can”.

News.com.au spoke to more than 10 former staff members at D365 Group who had taken matters to the Australian Taxation Office and the Fair Work Ombudsman.

In July last year, a senior executive sent an email to around 30 staff at D365 Group.

In the email, leaked to news.com.au, the employee encouraged his colleagues to use up all their holiday leave and check they were receiving superannuation and that tax had been correctly paid.

The email read: “Please check to make sure that you are: Getting paid super, End of year tax has been paid and you can do your tax returns. Use all of your holidays ASAP …

“Get out while you can.”

David Wakeman, one of the employees who quit his job at the end of 2021, claims he’s owed $45,000.

“It’s really frustrating. I haven’t had to do this before,” Mr Wakeman said, who is owed the largest amount of money that news.com.au knows of.

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Another previous employee, James Turnbull, claimed to news.com.au that it was “well-known” among staff that if they resigned, they might be “stiffed” through not receiving their final wages, leave entitlements or superannuation.

“Whenever somebody left, they would get stiffed, they wouldn’t get their final several weeks’ pay,” he told news.com.au of his observations of several staff members. “The trick which was well known in the organisation was to leave right after a payday to minimise the amount you could get stiffed, which is ridiculous. I left right after a payday.”

Employees are hopeful that the company’s demise will trigger a last resort government scheme called the Fair Entitlements Guarantee (FEG) designed to cover staff members’ lost costs.

However, superannuation is not covered under the scheme and there is also a clause that stipulates they have to have worked at the company in the past six months to be eligible.

Just two months ago, news.com.au also reported on a customer who claimed they were left $55,000 out of pocket after paying D365 Group for what they claimed was a product that did not work.

Sarah MacRae, the managing director of NSW-based 24/7 Care Services, issued a warning against D365 Group in August as the tech firm left her with a dud product.

The boss of the disability care provider took out a $55,000 loan to fund a CRM (standing for customer relationship management) system for her business, a single platform meant to streamline the booking and payment methods for her 43 clients.

D365 Group started building the software in August last year, with promises it would be done by October.

Instead, Ms MacRae only received the final product in June and she said it doesn’t work the way she was promised.

“It’s hard when you’re paying $1500 a month for a program you can’t use,” she told news.com.au.

“Now I’m using Excel documents, hours and hours of my time, doing everything manually.”

She contacted D365 Group for help but says they have “dumped us” and severed all contact.

She said part of the deal was for the system to be built and implemented, slated to cost $55,000, while a further $1500 would need to be paid every month for the licences and operation of the system.

Another NDIS provider who preferred to remain anonymous previously told news.com.au they hired D365 Group for a CRM interface, to create online systems that would organise their customer’s information.

“We did credit references on D365 Group, they came back positive,” the NDIS provider spokesperson told news.com.au.

“But subsequent to that, both of those referees have come back to me and apologised.”

They worked with the technology company over an 18 month period but when they were given the final product, they claim it didn’t work. This was in July last year.

alex.turner-cohen@news.com.au

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