Don’t leap to the conclusion that Hastie Group’s collapse over the weekend was the result of the sluggish Australian economy, especially the building and commercial construction business, or because of “financial irregularities” discovered in a Middle Eastern subsidiary of the group. While both played a part, Hastie has been one long, slow moving train wreck. If anything, the company’s deep, underlying problems lay in the Middle East and in the management suite of the group and its overly complex corporate structure.

That’s unlike financial problems that have hit local building firms such as Reed Constructions, St Hilliers and Kell and Rigby in the past three months. The problems that caused these groups to collapse or get into trouble were home grown. Hastie’s weren’t as obvious.

In fact, the first thing to be said about the Hastie’s collapse (in a blaze of stories this morning about potential job losses of up to 2000) is that the company’s problems appeared nearly two years ago and haven’t gone away. In fact it seems to have been a collapse that could have happened at least twice before last weekend. It hasn’t been an overnight event.

It reads something like: multiple profit warnings, a huge $170 million restructure in 2011 and new loan facility from its banks after spending seven weeks suspended, nearly $200 million in disclosed losses in the 18 months to last December, a second loan deal six weeks ago, new management and board members, a problem (again) in the Middle East with $6 million worth of performance bonds being cashed in by a client; and then another $20 million of “irregularities”, also in the Middle East revealed late last week. And projects in the Middle East were affected by the ripples from the Arab Spring, especially in the Gulf where Dubai and other markets struggled to regain their buoyancy after Dubai went close to collapse in 2009-10.

On top of this there was the impact of the Queensland floods in late 2011 and early 2012, the patchy nature of the building and construction sector on the east coast of Australia, the continuing weak and patchy nature of doing business in the Middle East (which has hurt the much bigger Leighton Holdings) and an overly complex businesses structure, with 44 subsidiary companies employing 7000 people in Australia, Britain, Ireland and the Middle East.

Then there’s the question of the latest “irregularities’ and the fact that the company says these date to the 2008-09 financial year. That in turn raises questions about the auditors, and about all those bankers and accountants who crawled over the company in last year’s complicated restructuring that saw the holders of about 80% of the-then issued shares wiped out and a hole new group of big shareholders brought in, starting with Lazards. Macquarie and UBS’ Australian branch were the advisers on that deal. That raises the question of just how detailed was the financial diligence by Lazards, Macquarie and UBS.

Private equity firm Lazard has a 25% stake in Hastie after taking the major role in last year’s recapitalisation. It should explain how its due diligence failed to find this claimed irregularity.

And the former board and management should be required to say something, after all, it happened on their watch, not under the new board and management brought in after last year’s rescue.

Then there are the banks who refinanced the first restructure of the debt last year, and then added more in the revamped deal in April. The Fairfax business pages and websites reported this morning that the banking syndicate is up for $500 million. The paper said the banks could be looking at a combined loss of $250 million (remember in financial collapses, the first estimate is always the smallest, they only grow as more debt is found and assets are sold at bigger losses).

The report on Friday by the company of an employee last week found to have falsified the company’s accounts, makes you wonder just who from the this banking syndicate did due diligence and its thoroughness. The amount involved, $20 million, is not a small amount for a company that was valued at $21 million when trading was halted last Friday. It was obviously big enough to destroy whatever confidence the banks had in the company, management and board (two independent directors jumped ship in Friday night).

The April revamp this year followed the $149 million loss for the six months to last December. The banks imposed new borrowing conditions on Hastie after the loss saw the company breach restrictions on last year’s deal. Those possible breaches would have allowed the banks to pull the plug on Hastie, which now seems to have transpired after the banks lost confidence in the company following Friday’s announcement of the “financial irregularities”.

The corporate watchdog, ASIC, has been told of the problem. When will it get around to telling the world what happened? We could be waiting quite a while.