In an extraordinary move, the commissioner heading Queensland's CFMEU inquiry, Stuart Wood, called a media conference to publicly question M1 Traffic Control's new operation on the Gold Coast.
Senior counsel assisting Patrick Wheelahan linked the Queensland operation to CFMEU corruption exposed in Victoria within barrister Geoffrey Watson's "Rotting from the Top" report.
In his report, Mr Watson noted Mr Gatto denied ownership of M Group companies but said the claim was "transparently false".
It identified "inexplicable favouritism" towards the group by the CFMEU, an arrangement that generated tens of millions of dollars.
Following the inquiry's intervention, Victoria's Labour Hire Authority confirmed it issued a notice of intention to cancel M1 Trades & Labour Pty Ltd's labour hire licence on Wednesday.
"If that final determination is upheld, M Group will be walked off any sites that they're on," Transport Infrastructure Minister Gabrielle Williams told reporters on Thursday.
"I'm advised that they currently have a presence on the North-East Link project."
A contract with Victorian statutory corporation Goulburn-Murray Water for field-based labour hire services, worth an estimated $1.6 million, also lists M1 Traffic and Labour as one of its suppliers.
Ms Williams said she had sought advice on whether the company was contracted to any other Big Build projects within her portfolio.
The firm has 14 days to respond and can continue to operate in the meantime.
Ms Williams refused to be drawn on the "accidents of timing" related to the issuing of the notice, declaring the authority had cancelled more than 140 licences as part of a broad investigation.
"This is the culmination of months of work," she said.
It should not have taken a Queensland inquiry to expose the "depth of corruption" on government-funded construction sites, Victorian Opposition Leader Jess Wilson said.
"Victorians know that Mick Gatto is a gangland figure," she said.
Mr Gatto was acquitted of murdering Melbourne underworld figure Andrew Veniamin in 2005.
He denies he was a construction industry standover man and profited from it.
"The Big Build has never, ever paid me a penny," he told 10 News in February.
"The government has never, ever paid me a penny. The unions have never ever paid me a penny."
Mr Wheelahan said M1 Traffic Control Group's corporate structure was similar to the company's Victorian set-up, naming Jordan David Paragalli as the Queensland company director.
The Watson report found that father Tony Paragalli was a frontman for Gatto, nominated as a "dummy director" for at least 28 companies in areas including security services, transport, hotels and telecommunications.Â
Jordan Paragalli said he was the sole operator of the Queensland business and had "absolutely nothing to do" with Gatto or Victorian corruption allegations.
"While it's under the same banner, it's a completely separate venture with no CFMEU link to it or anything like that," he told AAP.
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