Director questioned in court

THE director of a collapsed building company allegedly used company funds to do home renovations and service a fleet of vintage cars at a time when the company was strapped for cash, a court has been told.

During the final day of the public examination of United Project Partners in Brisbane

Federal Court on Friday, director Gene Farrelly was questioned over a number of irregularities that occurred before the company went bust in 2017 owing $13 million.

Barrister Gavin Handran, acting for the company’s liquidator said that between 2013 and 2015, Mr Farrelly used company money to renovate two of his Gympie properties, one of them had a horse arena and up to 20 cars, including vintage models.

Mr Handran said these improvements were occurring at the same time that United was “reaching into the pockets of investors for GST returns”.

“So it’s conduct which is not only not in the best interest of UPP generally,” Mr Handran said.

“It’s extremely detrimental to UPP to deploy its sparse resources in a way in which to benefit you carrying on improvements to your residential dwellings.”

Mr Farrelly agreed but said it was never the intention to use that money, but after a bank reneged on an unconditional contract it was an “emergency response”.

During the week-long public examination a number of allegations were aired, including that Mr Farrelly received $574,000 of investor funds and his alleged business partner

Jody Swain received $434,000 on top of their wages in 2015.

Mr Farrelly rejected that it was company money because he said they were lent the money instead of taking directors dividends.

Earlier this week Mr Handran also revealed an email that Mr Swain sent to Mr Farrelly in 2015 where he said to try and find extra cash for the struggling company he would go after investors’ GST refunds like a “bloodhound”.

Other allegations included that the company inflated building contracts to secure money from Westpac bank and an employee, who was a commissioner for declarations, was asked to falsely witness powers of attorney.

The liquidator will now prepare a report for the Australian Securities and Investments Commission.

–NEWSREGIONAL