Craig Kelly’s future in federal parliament could be decided by St George Bank following revelations aired in parliament yesterday concerning the Hughes MP’s business affairs.

Kelly, who worked for his collapsed family company as an export manager before his 2010 ascension to House of Representatives, was named in an administrator’s report early this year as being a possible “de facto” director of the beleaguered firm, flatpack importers DV Kelly.

St George, the single largest secured creditor of DV Kelly, is owed just shy of $2 million. A spokesman for liquidator Cor Cordis told Crikey this morning that it was “highly unlikely” that it would be able to recover any outstanding money from the collapse without a successful insolvent trading ruling.

While not listed as a director of the family firm, Cor Cordis has raised the possibility that Kelly and his brother, Jason, may have acted as “de facto” directors, placing them at risk of prosecution under Australian law.

The bank, a subsidiary of Westpac, has been invited by Cor Cordis to fund a claim for insolvent trading against DV Kelly’s directors. However, according to their analysis, Craig Kelly would be the only director (or alleged “de-facto” director), that holds significant assets worth pursuing.

In its previous administrator’s report published in February, Cor Cordis stated that Kelly “may” be a de facto director of the company and that despite denials from the MP’s father, it was continuing to investigate whether he was secretly pulling the strings.

In a pre-emptive strike following Craig Thomson’s speech yesterday, government attack dog and member for the nearby seat of Grayndler, Anthony Albanese, told the chamber that Kelly had also failed to declare his directorships of three related family companies — Homewares Depot, Valentino Franchising and Valentino Home Fashion — while sitting in federal parliament.

Under parliamentary rules, members have 28 days to declare any interests, including shareholdings and company directorships. Albanese has referred the non-disclosure to the Privileges Committee, which is also examining Thomson’s apparently tardy disclosure of legal fees paid by the Labor Party and the sale of personal properties.

Albanese also highlighted two instances in which Kelly had acted as a legal representative for the company in the 2011 NSW Administrative Decisions Tribunal, between nine and 12 months into his first parliamentary term.

Kelly later gave a personal explanation to the House in which he claimed his accountant had waited six months to tell ASIC of the resignation “due to ill-health and hospitalisation” and that he was not a qualified solicitor.

DV Kelly shut its doors late last year owing $4 million to a slew of secured creditors including St George ($2 million), Harvey Norman finance arm NCF (owed $130,000) and unsecured creditors including the Australian Tax Office ($760,000). Under the Corporations Act, directors can be held personally liable for insolvent trading and may have their assets seized under a court order. The may face civil penalties, including pecuniary penalties of up to $200,000. An MP must quit Parliament if they are bankrupted, a move that would force a byelection in Hughes.

Kelly holds Hughes by 5.2% and the seat would be expected to be vigorously contested by Labor. However, recent polling suggests the government would struggle to win the seat.

Crikey first drew attention to the storm surrounding Kelly in early March but it took until yesterday for the first media reports to filter through following Albanese’s statement. Sadly, the mention of Crikey in the chamber drew boos and guffaws from the opposition benches.

St George had a March 15 deadline to become a party to outstanding legal disputes — in which the company was previously represented by Kelly — to pursue damages claims from other firms including Sydney landlords that housed Kelly stock during a flooding incident. However, Crikey understands that the bank did not come forward before that deadline.

Three full-time staff and six-part time staff – unrelated to the Kellys – are still searching for $325,540 in unpaid wages, superannuation and leave. Cor Cordis said this morning that some of that money might be able to be sourced from the federal government under the General Employee Entitlements and Redundancy Scheme.

Perhaps ironically, Kelly was scathing of the government’s debt record when he was preselected for the Liberals in May 2010, telling the Liverpool Leader that: “I’ve been in small business for over 20 years — I can see the unfortunate direction this government is taking us.

“We’re building up an enormous amount of debt. As a small business person and a local person, I think it’s time to speak up.”

Cor Cordis is expected to deliver its final liquidator’s report to ASIC in coming months.