Privium Group administrators find potential breaches of the Corporations Act

The administrator's report, released on Tuesday, provides details of a raft of 'potential uncommercial transactions' and 'preferential payments to creditors' and says that if Privium Group and related entities are liquidated, which they recommend, they would seek to publicly examine the director and former directors.

Based upon the investigations of FTI Consulting, who were appointed administrators on November 17, the director Robert Harder and former directors may have committed offences under the Corporations Act. They included failure by company officers to exercise a reasonable degree of care and diligence in the exercise of their powers and the discharge of their duties, failure to act in good faith, making improper use of their position as an officer or employee to gain, directly or indirectly, an advantage, and incurring liabilities while insolvent.

The potential claim for insolvent trading may be of the order of approximately $2.5 million, suffered as a result of the director or former directors failure to prevent the companies from trading whilst insolvent, the report says. The administrators have also received allegations from clients regarding "potentially questionable practices" by the companies various marketing agents and referrers and if the companies are wound up, they, too, would be investigated, it says.

And the bottom line is there is nothing left over for would-be Hunter home owners and subcontractors caught up in the collapse, who have joined a long list of unsecured creditors. The best case scenario is a return of up to 5 cents in the dollar for secured creditors but there are question marks even over that amount, due to the complicated web of inter-company loans and an amount of $23 million owed to the Bank of New York.

Hundreds of home owners and their dream builds remain in limbo after Privium suddenly downed tools on sites all over the Hunter Valley as well as throughout Queensland and Victoria in November, affecting more than 2000 individuals, couples and families.

Experts say it could all have been avoided if governments had adopted recommendations to introduce statutory trusts as recommended. Hunter homeowners have gathered nearly 1300 signatures calling on the State Government to do more and to meet with them to answer their questions face to face. So far the Premier Dominic Perrottet. his office, and his ministers have not responded. Mr Harder could not be reached for comment.

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