Inside the downfall: Red flags before $28m Privium collapse

Building group Privium’s accounts show it was using a ‘currency’ to fund its operations as it headed towards a $28m collapse. Now the red flags leading to its downfall can be revealed.

Privium Group was using Bartercard to help fund operations as it careered towards a multimillion-dollar collapse raising red flags about its finances months before it called in administrators.

The Underwood-based company had $3.4m of Bartercard “currency” at cost on its books as of June last year, which it intended to use to run the company.

A home builder that uses millions of dollars of barter currency to fund a quarter of a billion dollar operation?

Bartercard holders use ‘trade dollars’ to purchase goods and services from other members. A building company for instance may buy $1000 worth of wood from a hardware shop. The seller is credited with 1000 trade dollars by Bartercard, while the purchaser’s account is debited the same amount.

Barter can be a useful tool to improve cash flow but as seen with Privum it also can mask deep-seated problems.

That’s something administrators FTI Consulting will no doubt be examine as they try to unravel the failure of the company that has left hundreds of people without a home and unpaid subbies heading towards a very unhappy Christmas.

Privium’s headquarters at Underwood.

WRITE DOWN

Another interesting transaction on the Privium accounts has caught the eye of City Beat’s resident forensic bean counter.

In the 2020 financial year, Privium Group, which also traded under the name Impact Homes, purchased 18 percent of a company called Growme (Aus) for $11.9m.

That valued Growme, which shares a registered address at Underwood with Impact Homes, at a whopping $67m. However, at the end of last year Privium decided to write down that investment to $600,000, meaning that in the space of 12 months the value of Growme went from $67m to $3m.

Queensland builder Privium collapsed with $28m debts.

A search of ASIC records show that Privium boss Rob Harder is a former director and current shareholder of Growme through various entities.

GrowMe’s current director is Chris Harasty, a consultant and former project manager at Impact Homes. Harasty declined to comment to City Beat yesterday about the transaction or Growme’s business. Mr Harder also did not repond to a request for comment.

It’s clear from the accounts a great deal of money was transferred out of the company in the last couple of years, including $22m in dividends from the various Privium entities despite losses of $28m. There is no suggestion that funds were transferred to Growme or Mr Harasty.

Annie and Raf Solomon Ryder have been left waiting for a year for their house to be built after troubled builder Privium collapsed.

SPARKS FLY

They have been keeping the lights on at Archerfield Airport for 30 years and now sparky Greg Enever and the team at Enever Electrical have been rewarded for their efforts. Enever Electrical picked up corporate project of the year at this week’s Australian Airports Association annual awards against a field of heavy hitters.

The Park Ridge firm was given the job of replacing Archerfield’s ageing lighting system with new LED ground lighting on the main runway and taxiways.

The design incorporates for the first time at Archerfield new visual aids at both ends of the runway including precision approach.

Archerfield Airport Corp boss Gavin Bird says the win by the local firm was a case of the “mouse that roared”.“It was a deserved recognition of an achievement that was 30 years in the making,” Bird says.

The firm has installed and maintained runway, taxiway and perimeter lighting as well in all infrastructure and buildings at Archerfield Airport since the 1990s. We hear in the early days Greg Enever had to scrounge for parts to effect repairs, sometimes having to manufacture some components.

Archerfield, which was Brisbane’s main international hub in the 1930s, also picked up an award being named Australia’s metropolitan airport of the year thanks to an extensive program of innovative infrastructure modernisation and improvement.

Archerfield Airport.