Podular took new deposits weeks before collapsing, owing $5.2 million

Podular Housing Systems, a modular home builder promising fast factory-built kitset homes, went into liquidation on November 25, 2022 owing an estimated $5.2 million. The liquidator's first report estimated the company had taken $2 million in deposit payments from clients for house builds that were never started.

The timing drew the sharpest questions. On October 31 — two weeks after a Podular shareholder emailed customers saying their builds had been 'significantly delayed' because of 'serious mismanagement' at the company — director Charles Innes signed a contract with an Auckland couple, who paid a $56,000 deposit days later. A Podular employee with knowledge of the finances said it was wrong to accept the payment, believing the company was already in trouble and the deposit should have sat untouched in a trust account; instead it was spent 'very quickly', most likely on staff salaries, he claimed.

By then Podular had accepted payments on more than 50 home builds it had either not completed or not started. At least one customer complained to the Serious Fraud Office about Innes. Thirteen customers shared their stories with the Herald — among them Wellington doctors facing a $500,000 loss on an unbuilt Marlborough Sounds home, and a couple who feared paying a mortgage forever on a house they would never have.

The company kept selling and taking deposits while more than 50 builds sat unfinished or unstarted and costs went unmet.

Deposits appear to have been spent on operating costs instead of being held in trust, so delays became losses.

Management's own shareholder communication had already admitted 'serious mismanagement' two weeks before a new sales contract was signed.

Deposit money is a promise, not working capital: a builder that spends customer deposits on salaries converts a construction delay into a fraud investigation.

Liquidators identified 217 creditors claiming money, including district councils, the Inland Revenue Department and tradespeople. The collapse ranked among the largest in New Zealand's modular home sector, and at least one customer's Serious Fraud Office complaint put the director's conduct under potential criminal scrutiny. Innes did not comment for the story but had previously said 'sorry' to customers.