Almost 3,000 workers have been stood down in Victoria, New South Wales and the ACT after engineering services company Hastie Group was placed into administration.

Administrator PPB Advisory said 2,700 Australian jobs were on hold after the collapse of the company, which employs more than 7,000 people worldwide - 4,000 in Australia and 3,000 overseas.

But PPB was hopeful that many of those affected would be able to stay in work once details of the company's position were clarified.

PPB director Ian Carson said its forensic investigators would prepare a report for the Australian Securities and Investments Commission (ASIC) into a $20 million "accounting irregularity" that precipitated the collapse, making it difficult for Hastie to renegotiate its loans.

Former Hastie Group chief executive Bill Wild said the accounting irregularities arose in a West Australian business acquired by Hastie, and he believed the WA business had been manipulating the figures for four years.

"The practice developed in that part of the business - of putting off bad news and moving numbers around to ensure that budgets were still met and forecasts were still met - I don't think it went back earlier than 2008-09," Mr Wild said.

Virtually every major Australian bank was exposed to the company's debts of about $250 million, which they could ultimately be forced to write down.

Mr Carson said the company had been struggling under its debt burden for some time, and the accounting error was simply "the straw that broke the camel's back".

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 35 seconds 5 m Business editor Peter Ryan with Ian Carson Download 2.6 MB

Mr Wild described the collapse as "gut-wrenching", as executives had been working hard to turn the company around for the past few months.

He says a recapitalisation deal with two major investors was nearly sealed before the accounting problems were discovered.

"Having got through the big write-backs and having got through the issues in the Middle East with bonds being called, to get within sight of the finish line and be there with the banks in virtual agreement with our recapitalisation proposals, and then to have this pop up - it was very shattering for everybody," Mr Wild said.

Prime Minister Julia Gillard told Parliament she was concerned for those affected by the collapse, and said the Government was working closely with administrators to ensure workers received help.

"I note that the administrators are working with project managers to see if blue-collar employees can be transferred or made available to head contractors to complete projects currently underway, but all workers who are made redundant will be entitled to tailored support from Job Services Australia," Ms Gillard said.

Federal Employment Minister Bill Shorten expressed disappointment that the job losses had been brought about by poor financial management.

He said significant penalties would apply if ASIC found evidence of illegality.

PPB has been appointed administrator of 44 companies in the group, which operates largely by acquiring smaller existing businesses, and Mr Carson hopes that most job losses will be avoided by saving some of the viable businesses in the group.

"This is a very large failure of a major Australian company," Mr Carson said.

"We're hopeful that out of the failure a number of businesses will continue.

"So whilst it's a major failure, the end result may be that we end up with viable businesses, and it may be that the business which had been established, ie: Hastie, was not a viable business model."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 3 minutes 22 seconds 3 m 22 s Business editor Peter Ryan on the expected job losses at Hastie

Workers gathered at Hastie's offices in Melbourne and Sydney this morning for an announcement on the job cuts.

Operations have ceased at Hastie's mechanical, electrical and plumbing businesses locally and in the Middle East, but Mr Carson says he is confident job losses will be minimised as projects are re-started.

Major projects on hold as a result of the collapse include work at the Royal Adelaide Hospital in South Australia and Gold Coast University Hospital in Queensland.

"A lot of the contracts that Hastie is involved with will have to be done whatever happens, so either Hastie will finish them or the head contractors will take over, and we understand that a number of employees have already been approached to start employment with the head contractors," Mr Carson said.

Hastie's New Zealand operations continue as normal, and the company will look to sell its UK and Ireland interests.

PPB says it will pay employee entitlements as a first priority with funds raised in the asset sales.

The plumbers' union says many businesses will be brought down by Hastie's collapse.

Earl Setches from the Communications, Electrical and Plumbing Union told ABC Local Radio that it was a sad day for the workers of the companies taken over by Hastie.

"The workforce is sanitary plumbers, so basic plumbing companies; mechanical plumbers who install air conditioning; sprinkler fitters who install fire protection in buildings; and also there are a number of electrical companies," he said.

"It's a sad day that these mum-and-dad companies that were bought by Hastie Group will be all wound up."

However, Mr Setches says entitlements are guaranteed and projects the workers are currently working on will be completed.

ABC business editor Peter Ryan says Hastie suffered during the global financial crisis and because of the high Australian dollar.

In December the company recorded a half-year loss of $150 million.

"Hastie has found itself in difficulty renegotiating its debts with major banks around the world, [not only] the four big banks in Australia, but other global banks," he said.

"The problem Hastie has had is that last week, when a $20 million accounting irregularity, an accounting black hole, was uncovered, that has made it very difficult for Hastie to renegotiate with the banks to get themselves out of this mess.

"And so over the weekend administrators and receivers were appointed."



The Hastie Group website describes the company as "the leading international designer, installer and maintainer of technical services to the building and infrastructure sectors — mechanical, electrical, hydraulics and refrigeration, with well established operations in Australasia, the UK and the Middle East."

Hastie Group shares were suspended from trade in the middle of last month with a closing price of 16 cents per share.

On Friday, Hastie announced that two of its non-executive directors were stepping down.

Australian Manufacturing Workers Union national secretary Paul Bastian says he is very concerned at the prospect of job losses.

"Obviously our priorities will be to see whether or not we can get some jobs out of the exercise," he said.

"The banks, as I understand, are owed around $540 million."

PPB Advisory has set up a hotline for those affected by the collapse. For more information call 1300 868 464 or visit its website.