Marles and Husic fall silent on Scale founder David Collard; Cotsis questions icare NSW hirings

Scale Facilitation boss David Collard takes in the views from the One World Trade Centre office. Picture: Abby Holden

Start-up leaders can only dream of the attention that Deputy Prime Minister Richard Marles has lavished upon David Collard, the besieged businessman who helms the ailing battery investment firm, Scale Facilitation.

Scale’s offices were raided by federal police and tax office agents last month on a suspicion that some kind of fraud had been committed.

Presumably this development came as a surprise to Marles, a close pal whose cheerleading of Scale Facilitation has veered into obsequiousness.

It’s embarrassing that Marles dubbed Collard a “force of nature” and “innately entrepreneurial” during the opening of Scale’s offices in Manhattan last year, a soiree attended by Nick Greiner and Mitch Fifield, Australia’s ambassador to the UN, along with Liberal leader Peter Dutton.

Marles was at it again in May during a speech to the American Chamber of Commerce in Australia, where he engaged in much ballyhoo about Collard and declared it a “great honour” to have attended that event in NYC six months earlier. At that point, Collard hadn’t produced a battery to speak of, nor has he since.

One day later, Marles made a personal visit to the site of Collard’s proposed electric battery gigafactory in Geelong, trudging through the crab grass and dirt with Industry Minister Ed Husic for photos that were dutifully published on Scale’s website.

Geelong, of course, is in Marles’ electorate of Corio, so one would expect him to turn out in support of a local project.

But Margin Call understands there’s a relationship between them that’s exceptionally close. They meet privately, dine together, Marles inexplicably falls over himself to praise the guy, and they correspond using the encrypted messaging app Signal.

David Collard with Deputy Prime Minister Richard Marles in the online communication.

“Great to see you,” Marles wrote to Collard, sharing a selfie of the pair at a British restaurant earlier this year.

Collard put a love heart emoji on the photo in response, writing back: “You too hopefully today goes smooth (sic).”

Collard was referring to an impending foreign policy engagement that Marles had scheduled with his British ministerial counterparts (and who knows what else Collard might have been told about it).

The more salient question is whether Collard has ever leveraged this close relationship with Marles while applying for funding from the Department of Industry, which answers to Husic as the portfolio minister.

The application, Margin Call has learned, was directed to the government’s R&D Tax Incentive program, a worthy initiative that returns money to businesses that invest in research and development.

Documents obtained by this column suggest Collard tried out some ministerial suction to speed up the department’s cumbersome decision-making on Scale Facilitation.

In May, while Marles was hyping up Scale at the AmCham event and inspecting Collard’s phantom gigafactory (now thought to be abandoned), a bureaucrat told Collard that it wouldn’t be possible to bring forward the decision date.

They added: “Please also note that R&D Tax Incentive decisions are made at arm’s-length to the Minister, and that the program is co-administered by the department … and the ATO.”

And it was, of course, the ATO, in conjunction with federal police, who raided the Scale offices in Geelong a few weeks after that email was dispatched.

It’s too soon to tell whether the application had any bearing on the raid, although one reliable suggestion to Margin Call is that Collard’s pursuit of credit funding – in the order of about $60m – might have been sought for R&D equipment that was still in the process of being purchased. Not sure that’s allowed.

Marles declined to respond to a series of questions seeking further information about his affiliation with Collard, or whether he had any involvement with the R&D application, or whether he held discussions with Husic’s office – and Husic didn’t reply to similar questions.

Collard did ultimately receive some joy from Husic’s department. His tax advisers at PwC were informed last month that Scale’s projects would be given Advance Finding status, a designation that would allow him complete further financing activities. The cash refund, however, wasn’t approved.

Undeterred, Collard told colleagues: “Some activities rejected but PwC going to challenge them and key take away is enough activities accepted to allow for financing.”

Meanwhile, his staff haven’t been paid for months.

Minister concerned

Margin Call’s reporting on Insurance and Care NSW and its commitment to recruiting interstate executives who’ve all worked at length with CEO Richard Harding was shrugged off internally at the agency. Not so in the halls of power.

NSW Work Health and Safety Minister Sophie Cotsis apparently seized on the revelations in this column and took the step of emailing icare’s board chair John Robertson last week to ask why so many of Harding’s old colleagues have been employed in high-paying roles.

The issue, as previously reported, is not necessarily that the four individuals all worked with Harding at Tower Insurance, or the Territory Insurance Office, or Insurance Australia Group.

NSW Work Health and Safety Minister Sophie Cotsis. Picture: Simon Bullard

It’s really that they live outside NSW and fly in from Adelaide, Darwin and Brisbane to show their faces a couple of days per week.

No on-record reply from Cotsis, but she wants to know why these people were recruited above anyone else available in Sydney and whether there was, in fact, any conflict of interest at play with Harding (he’s previously denied any role in their recruitment).

There’s also the small matter of whether their travel and accommodation expenses were incorporated into their salaries – and Margin Call understands that to be the case for at least one individual.

Labor took savage glee in attacking icare while it was in opposition but so far no appearance of long knives for anyone at the agency. No surprise, really, given Robertson is a former Labor opposition leader. “The icare chairman has received the email and will respond to the minister in due course,” a spokesman said.