Failing Privium paid out millions to Christian charity The Promise, court told

The boss of failed building giant Privium Group said he did not recall the source of millions of dollars allegedly paid into companies linked to a Christian charity he set up.

Former Privium Group boss Robert Harder leaves Brisbane Federal Court on Thursday. Picture: John Gass

The boss of failed building giant Privium Group, Robert Harder, said he did not recall the source of millions of dollars allegedly paid into companies linked to a Christian charity he set up, a court heard.

A Federal Court public examination on Thursday heard that Privium declared an $18m dividend in 2020, of which the court heard more than $2m went to charities called The Promise and Love Your World. Privium collapsed the following year owing $80m.

Mr Harder told the court he could not immediately recall the name of the bank or the details of the accounts the money was paid into because of what he called “messy” paperwork.

“We did an ATO (Australian Taxation Office) review and we realised that bank accounts were used for the wrong companies, which is highly embarrassing for us,” Mr Harder told the court.

“We had very sophisticated software and to do that is embarrassing on our behalf. I’m not trying to be funny, I’m trying to just answer the question honestly. I just can’t recall the name of the bank.”

Later, Mr Harder clarified that The Promise received the funds in the form of loan repayments from Privium shareholders that were in turn invested in digital tokens in a company called Open Gold. He said those funds were then reinvested back into Privium as part of a series of “round-robin” transactions needed to ensure the group did not breach its lending covenants with financiers.

Mr Harder is appearing in court as part of a public examination by liquidators investigating one of the country’s largest construction sector insolvencies.

The failure of Privium Group, one of Australia’s top 10 home builders, three years ago sent shockwaves through the construction sector and left more than 700 unfinished homes across the country. Peter Somers, counsel for liquidators FTI, said a series of transactions and loan agreements showed in all around $7m flowed to The Promise, which Mr Harder earlier described as a charity set up to spread the Gospel.

But Mr Somers said at the end of these transactions, The Promise had only $1581 in its account. “Where is the balance of the $7m?” Mr Somers asked.

Earlier, 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.