A fledgling “green coal” company owned by two Queensland Liberal National party figures has had its bank account frozen and become mired in legal action, 18 months after being awarded a $5.5m commonwealth grant in the dying days of the Morrison government.
Guardian Australia can reveal the federal government is “considering its position” in relation to the grant to Green Day Energy, after the company was placed in voluntary administration by director David Hutchinson, the former LNP president. Hutchinson is being sued by Green Day’s largest shareholder, Brad Carswell, a former party official and candidate.
The company was registered with the Australian Securities and Investments Commission three days before Christmas in 2021 – the same day that the federal government released the grant guidelines for its “securing raw minerals program”.
In April, a week before the Morrison government went into caretaker mode, Green Day Energy was awarded $5.5m from that program – the equal largest individual grant to any company – to build a biomass plant in the north-west Queensland town of Richmond.
The project would involve converting prickly acacia, an invasive outback weed, into woodchip pellets with properties similar to coal. It had backing from the local council and Central Queensland University.
The grant was approved by the then minister for regionalisation, Bridget McKenzie, after being assessed by the government business grants hub and reviewed by a committee.
McKenzie made several election announcements in the following weeks about regional businesses awarded money from the $29m securing raw minerals program. The grant to Green Day Energy, however, does not appear to have been announced publicly until after the election.
A spokesperson for McKenzie said the office of the former deputy prime minister, Barnaby Joyce, had taken carriage of an announcement because McKenzie was not visiting the region.
“To the best of our recollection the former minister did not meet or speak with Green Day Energy prior to the grant being awarded,” the spokesperson said. “Senator McKenzie was the responsible minister for the program, which was a competitive grants program.”
Take no ‘further step’ in administration
On 5 September this year, Hutchinson called in administrators after NAB froze the company’s bank account, which holds grant money paid by the federal government.
Documents filed by administrators with Asic show the company has $1.04m in the account and claimed debts of about $147,000. All listed creditors are company shareholders, including Hutchinson and Carswell, or related entities.
Three weeks after the company went into administration, Carswell lodged legal action in the federal court against Green Day Energy and Hutchinson.
On 29 September Justice Roger Derrington ordered the administrators turn over documents relating to the financial affairs of the company, including bank statements and “all progress and financial expenditure reports and statements submitted by the company to the commonwealth of Australia”.
Derrington also ordered the provision of all documents concerning the authorisation of company payments, including wages and salaries, to Hutchinson.
The court also ordered the administrators be restrained from “taking any further step” in the administration of the company, other than to preserve assets or communicate with the commonwealth in relation to the grant.
The legal action is ongoing.
A spokesperson for the department said it was aware of the federal court case and could not comment on its status.
“The department is currently in discussions with the business grants hub, which administers the grants under this program on behalf of the department, regarding the grant in light of the ongoing proceedings.”
Guardian Australia approached Hutchinson and Carswell for comment.
The pair were former political allies and LNP sources say they were also good friends.
Hutchinson resigned from the party presidency in 2020 after controversy about his employment by the billionaire businessman Clive Palmer, who founded political rival the United Australia party. It is understood Hutchinson has not been actively involved in the LNP since his resignation.
Carswell ran unsuccessfully for the LNP in the seat of Lilley at the 2019 federal election. Guardian Australia reported at the time that a Facebook advertisement for Carswell had been promoted by an account linked to Palmer’s United Australia party.
He also stood in the state seat of Stafford in 2009.
