Company collapse leads to David Crisafulli’s $200,000 settlement

David Crisafulli agreed to pay $200,000 in compensation for alleged insolvent trading to avoid being taken to court by liquidators.

Queensland Premier David Crisafulli in Brisbane on Monday. Picture: Lyndon Mechielsen

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David Crisafulli agreed to pay $200,000 in compensation for ­alleged insolvent trading to avoid being taken to court by liquidators after the collapse of a company for which he was sole director.

Documents released under Right to Information reveal the full extent of liquidators’ action taken against the now Queensland Premier in late 2019, when he was an opposition frontbencher. The documents show PwC liquidators issued the “insolvent trading claim” and demand for payment against Mr Crisafulli, who then offered to settle it for $200,000 in three instalments – to avoid being taken to court and without admitting liability.

Before leading the Liberal National Party to victory at the October 26 state election, Mr Crisafulli denied the company – Southern Edge Training – had traded while insolvent, and ­repeatedly refused to say why he had paid the money.

He never disclosed the settlement or the three payments over 12 months on his parliamentary register of interests, a possible breach of the rules, which require liabilities over $19,000 to be ­declared within one month.

But a never-before-seen October 2019 report by PwC – released under FOI to the Labor opposition – sheds more light on how and why Mr Crisafulli paid the money in 2020 and 2021, when he was an opposition frontbencher and then opposition leader.

He had been sole director and chief executive of the training company from December 1, 2015, to April 1, 2016, just after he lost his north Queensland seat of Mundingburra at the 2015 election. The report reveals that the PwC liquidators issued an “insolvent trading claim” against Mr Crisafulli “in relation to compensation for the loss resulting from insolvent trading for the period 1 December 2015 to 1 April 2016”.

Mr Crisafulli on election night, October 26, 2024. Picture: Liam Kidston

“Following subsequent confidential ‘without prejudice’ negotiations, I have received an offer from the director to settle the claim for $200,000 without ­admission of liability, payable by way of instalments as follows: $80,000, $60,000, $60,000.”

Documents filed with the corporate regulator ASIC showed Mr Crisafulli paid the instalments on March 12, 2020, July 30, 2020, and July 19, 2021.

The PwC liquidator recommended to creditors that they ­accept the settlement offer proposed by Mr Crisafulli because it provided “the best possible return to the liquidation having regard to various factors including the director’s personal financial position (and) expected legal costs and time costs that would be incurred by me and my staff if I were required to commence legal proceedings to pursue the claim through a court process”.

A meeting of creditors – including the commonwealth government – on November 21, 2019, unanimously approved the settlement’s terms and the timetable for Mr Crisafulli to make the payments. During last year’s election campaign, The Australian asked Mr Crisafulli what the $200,000 payment was for.

He said: “When you are a ­director of a company, that means you have obligations, so I met them. And I contrast that with the way I’ve seen this current government walk away from transparency.”

A month earlier, on September 10, he was asked whether SET was trading insolvent while he was a director. “No,” he said.

On Monday, a spokeswoman for Mr Crisafulli said: “The report shows there were zero findings against him and he has met all ­obligations for his short four-month tenure at the company in long-term trouble.”

The liquidators’ reports reveal the company was in ­ trouble before Mr Crisafulli took it over, and liquidators noted that “cash flow difficulties” had prompted former directors to try to sell the business in November 2015, when it was unable to pay its creditors.

During Mr Crisafulli’s tenure, the Victorian Department of Education and Training issued the company with a “notice of noncompliance” indicating SET had breached its deal with the Victorian government to receive taxpayer funds.

In March 2016, the department rejected the company’s application to renew its registration as a training organisation.

The company – which was based in Victoria but operated in that state and Queensland, propped up by millions in taxpayer funding – also could not pay its tax debts and the Australian Taxation Office threatened legal action against the company when Mr Crisafulli was at the helm in December 2015.

At the time, it owed more than $112,500 to the tax office.

In October, The Australian revealed Mr Crisafulli had quit the company two days after the Australian Skills Quality Authority warned SET it had uncovered ­“training quality issues” and was rejecting its national registration.

The company collapsed two months after he left the business.

Separately, an Ernst & Young audit found the company had repeatedly breached its contract with the Victorian government and had made claims for taxpayer funding for “ineligible” overseas students on temporary visas.

In the dying days of the election campaign, then Labor deputy premier Cameron Dick wrote to parliamentary clerk Neil Laurie to refer the matter to the ethics committee, alleging the $200,000 should have been disclosed as liabilities. The matter is now under investigation by the committee.

Under standing orders, a liability is defined as “an obligation that legally binds a member, or ­related person, to settle a debt”.