Modco Residential: Glamour couple’s Yusuf Khan and Cynthia Lu’s building and construction company plunges into administration

A glamorous couple flaunted their lavish lifestyle before their construction company suddenly collapsed with some contractors claiming they were still owed money.

Cynthia Lu and Yusuf Khan’s Perth-based company Modco Residential announced Monday that it has entered voluntary receivership.

The organization launched in 2020 with an exclusive VIP party attended by Perth’s supercar-driving A-list – before collapsing just three years later.

Damien Clancy, director of Modco Residential, has released an emotional letter blaming industry and media challenges for the company’s demise.

The shocking news comes as some contractors claim they are still waiting for their six-figure bills to be paid with complaints dating back to April 2022.

Ms. Lu’s Instagram account is full of photos showing off her and her partner’s glamorous lifestyle – with the pair posing in front of luxury cars and flying business class on flights.

It launched in late 2021, an exclusive VIP party attended by WA’s A-list (pictured)

“Despite our efforts to overcome setbacks 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 among stakeholders, became an insurmountable challenge,” Mr. Clancy’s statement read.

What initially began as a nationwide industry challenge of higher costs of materials and labor and a shortage of skilled craftsmen, forcing many builders into administration over the past fiscal year, was then exacerbated by the intense media attention focused on Modco Residential, creating distrust among our craftsmen, vendors, staff, shareholders, customers and the industry insurer QBE.

“This created significant pressure on the business and made it extremely challenging for us to recruit skilled professionals, retain staff and continue our business.”

Mr. Clancy informs that the company has appointed GTS Advisory administrators and apologizes that the company cannot meet its obligations.

But he stopped taking any responsibility for the company’s collapse.

“In this moment of profound sadness for all affected, we hope that the closure of Modco will be a catalyst to highlight the need for systemic change and industry support to address the issues that remain within the construction industry,” the letter added.

‘The manager, GTS Advisory, will contact all parties involved.

“In the face of adversity, we bid farewell with a heavy heart.”

Daily Mail Australia contacted Modco Residential for comment.

On May 20 this year, it was revealed that the company would be evicted from its Osborne Park headquarters after failing to pay rent for four to five months, according to The West Australian newspaper.

Founded in August 2020, Modco Residential has vowed to build cost-effective homes within a short period of 20 weeks.

The company was evicted from its Osborne Park headquarters after reportedly falling behind on rent. The Western Australian reported.

The company has been in trouble for over a year

The company’s chief executive partially blamed the media for the collapse, telling investors and creditors: ‘we bid farewell with a heavy heart’

Several dissatisfied customers have taken the company to court with as many as four disputes before the state administrative court.

Building and Energy has also claimed that several complaints have been filed by homeowners and contractors.

Mr. Khan has a background in development and construction and is a director of private equity firm Perth City Investments Pty Ltd.

He has described Cynthia as his “life partner” and “right-hand man,” who oversees legal, 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 list of Australian construction companies going under.

Construction companies are still reeling from the effects of the Covid pandemic with an additional global shortage of timber and construction materials due to choked supply chains affected by the conflict between Russia and Ukraine.

This has caused material costs to increase by more than 20 percent since early 2022, with some items rising even more.

Pine wood has more than doubled in price, while reinforcing steel, glass, drywall, fiber cement and other materials have also skyrocketed.

Such price increases meant that many permanent contract construction projects were no longer viable.

Across Australia, bankrupt companies owe hundreds of millions of dollars to subcontractors, traders, customers and the tax authorities.