THE BOSS of embattled home building giant Privium Homes says he is 'deeply sorry' for putting Privium Group into voluntary administration.
Privium Group director and chief executive officer, Robert Harder, has written to 'valued clients and suppliers' saying he 'knows saying sorry' doesn't make the situation better.
Many NSW Hunter Valley-based would-be new home owners received the letter about 8pm on Wednesday night, shortly before Port Stephens MP Kate Washington called on the state government to do more to help them, along with sub-contractors and suppliers who have been left in the lurch in the wake of the builder's demise.
"I understand that this is not the news you wanted to hear and that this will create real difficulties," Mr Harder said. "For this I am deeply sorry."
Privium appointed John Park, Joanne Dunn and Kelly Trenfield of FTI Consulting as voluntary administrators on Wednesday after hundreds of builds came to a sudden stand still last week, with most Hunter homeowners finding out when tradies downed tools at their Privium job sites on Friday, November 12.
"In recent times, like many Australian builders who have been faced with COVID-19 induced supply delays and sharp increases in construction costs, Privium's cashflow position deteriorated," Mr Harder said.
A lack of building materials, coupled with the "typically slow payment cycle across the Christmas period" meant the appointment of voluntary administrators provided the best pathway forward for all stakeholders, he said.
IN OTHER NEWS:
At close to 11pm in parliament on Wednesday night, Ms Washington called for "an urgent investigation'' into how Privium was allowed to keep trading and taking deposits after posting a $28 million loss in the 2019/20 financial year, as well as paying out tens of millions of dollars in dividends in the same period.
"That should have been a big red flag for the NSW Building Commissioner and the NSW Government, but nothing was done," she said. There are "serious questions" around whether the company had acted in good faith, she said.
The latest financial reports lodged with lodged with corporate regulator, the Australian Securities and Investments Commission (ASIC) reveal that two of the biggest Privium entities, Privium Homes Pty Ltd and Privium Pty Ltd, owe trade creditors upwards of $40 million.
That is a frightening figure for the many sub contractors who are owed money, with unpaid bills and debts mounting up around them.
In her speech to parliament Ms Washington said one affected apprentice has not been paid for two months and has had their work car repossessed because they couldn't make the repayments. "Those are honest, hardworking people who have been taken to the cleaner by that company," she said.
Workers employed by Privium are among the homeowners affected, so have lost their jobs as well as being left wondering what will happen next with their builds, and when.
Mr Harder has denied any wrongdoing, saying the directors of Privium had "at all times acted properly", conducting the financial affairs with "the greatest of integrity".
"In fact, our fully audited financial reports are available through ASIC," he said. "While I know this doesn't make it easier for you, I ask you not to believe any claims to the contrary."
NSW Fair Trading has launched an investigation into the operations of Privium while icare Home Builders Compensation Fund (HBCF), overseen by the NSW treasurer but independent from government, says it is aware of and contacting 145 affected home owners throughout NSW.
Affected Hunter suburbs include Medowie, Raymond Terrace, North Rothbury, Tanilba Bay and Karuah, as well as families from Maitland, Cessnock, Newcastle, Lake Macquarie and on the Central Coast.
Some fear they are on the brink of becoming homeless as they struggle to pay mortgages as well as rent and other fees associated with their builds which have come to a sudden standstill overnight.
Ms Washington has pointed to an inquiry into insolvency in the NSW Construction Industry which produced 44 recommendations to increase protections, including that money be held in trust so that the ripple effects could be contained. "Nine years on the government still has not implemented those changes," she said.
Until Privium is declared insolvent, families cannot start the painful process of making a home warranty insurance claim and complete their builds, she said. "Instead, they are facing delays, irrecoverable losses, stresses, and continuing heartache."