THE BOSS of embattled home building giant, Privium, says he is 'deeply sorry' for putting Privium Group into voluntary administration, and that he knows 'saying sorry' doesn't make the situation better.
Would-be new home owners across the Hunter 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 protect the home owners, sub-contractors and suppliers who are being left in the lurch in the wake of the builder's demise.
The director and chief executive officer of Privium Group, Robert Harder, addressed his letter to 'valued clients and suppliers'.
"Today, as you would have seen in the media, I placed entities within the Privium Group into voluntary administration. I understand that this is not the news you wanted to hear and that this will create real difficulties. For this I am deeply sorry."
He cited "recent steep increase' in construction costs and supply shortages, and said that despite his team's tireless efforts to provide solutions for their clients, the best outcome for everyone was to bring in external assistance, he said.
Privium appointed John Park, Joanne Dunn and Kelly Trenfield of FTI Consulting as voluntary administrators on Wednesday after building of homes - up to 145 in NSW and 160 in Queensland, and more in Victoria, stopped suddenly last week, with most Hunter homeowners finding out 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, including key construction components such as timber roof trusses, plasterboard, timber frames, hardwood beams, and pods for concrete slabs, saw an inability to deliver progress claims based on staged completions, despite the vast majority of that stage's work being completed.
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This negative timing issue, coupled with the typically slow payment cycle across the Christmas period, means that the appointment of voluntary administrators provides the best pathway forward for all stakeholders."
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.
In his letter, Mr Harder said 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."
MORE TO COME
