Court told profits from failed building giant Privium were earmarked to spread the gospel

Three years after building giant Privium’s spectacular $80 million collapse, which left more than 700 homes unfinished, its founder has told a court what he’d planned to do with a percentage of its profits.

Robert Harder started his working life as a carpenter before starting Privium.

The founder of failed building giant Privium Group said he planned to give a certain percentage of its profits to a charity to spread the Christian gospel before the company’s spectacular $80m collapse three years ago.

Robert Harder, who describes himself as a Christian, told a Federal Court public examination in Brisbane that he had planned to donate 10 per cent of Privium’s profits to a charitable trust called The Promise he had set up to “spread the gospel”. Mr Harder said he was the trustee for the charity that was linked to a church.

The failure of Privium Group three years ago sent shockwaves through the construction sector and left more than 700 unfinished homes across the country.

Mr Harder was asked about the complex network of companies and transactions set up before Privium spiralled into liquidation, including $11m in loans from the group to a related firm called Property Alternative Group that were written off.

Property Alternative Group earlier in the examination had been described as a vehicle for Mr Harder’s property projects.

Mr Harder said he did not recall the reasons for the write-off, which he said had been suggested by company auditor EY and occurred during the Covid-19 pandemic.

Mr Harder, a former carpenter who had built Privium into one of the country’s biggest home builders, appeared confused and frustrated when questioned further about the write-off.

“So now you’re asking me, am I lying to you? I’ve just sworn on the Bible that I am speaking the truth,” Mr Harder said, in response to questioning from Peter Somers, counsel for liquidators FTI.

“The world was in chaos. This is my life here. Do you think that I wanted my business to go broke? There was a world pandemic.”

Mr Harder told the court he had helped set up another charity called Joii with his teenage son to handle the construction and other labour work for the Privium Group.

Privium’s workers were later transferred to Joii under an arrangement which involved the group paying a fee to the charity for services rendered.

Brisbane couple Annie and Raf Solomon Ryder were among homebuyers affected by Privium collapse in 2021.

Mr Harder described himself as an “ideas man” whose “brilliant” scheme to help struggling homebuyers only failed when his major financier withdrew.

He said he came up with the idea to provide a $40,000 deposit rebate to customers so they would purchase a home from the group.

He said the deposit, which was later repayable to Privium at an interest rate of 4.5 per cent, only ended when the company’s major lender, FIIG Securities, decided it did not want it to proceed.

“Privium had $44,000 of commissions built into every single house that we used to pay an external marketing company,” Mr Harder told the court. “And so we decided we would rebate that back to the client as a deposit. It was a brilliant scheme.”

Mr Harder told the court the deposit scheme ended when FIIG said “they wanted us to shut it down because they didn’t like it”.

“It was absolutely crazy on their behalf,” Mr Harder said. “It wrecked one of our strong profit-making divisions. We’re giving 40 grand back to the client and all of a sudden, we’re making an extra 40 grand a house. Do your sums.”

Mr Harder told the court that Privium ran two sets of books: one for auditing purposes and one for tax deductions, but conceded the set up “totally confused the crap out of me”.

“There’s a separate tax set of books and there’s a separate auditing set of books because there’s different rules about which I don’t understand,” he said.

“I didn’t write the tax rules or the accounting rules. I’d assume you’d actually know that because I’m not trying to trick anybody.”

Mr Harder said he was not aware of the extent of the company’s mounting losses when it declared a $18m dividend in 2020. But he said those funds were reinvested back into the company by shareholders through a vehicle called Open Gold.