France’s solar liquidation leaves Queensland business in the lurch


The liquidation highlights the risks local companies face when contracting to foreign-owned corporations on government projects, just as the Commonwealth negotiates its biggest-ever defence contract with another French government entity, submarine builder Naval.

Areva Solar KCP told the Supreme Court in October 2016 it had “paid-up capital of many millions of dollars” but liquidation reports show it now has just $5700 in the bank.

Dalby businessman Hermes Speziali, who owns Nortask, said he had tried in vain since 2015 to get assistance from the state and federal agencies responsible for the project.

“The Queensland government didn’t want to hear. CS Energy didn’t want to hear. We tried to talk to ARENA, the entity that supplied the subsidy to the project at federal government level – they didn’t want to know,” he said.

CS Energy and Areva Solar cancelled the solar boost project in early 2016, blaming “fast-moving clouds” and technical problems. But a whistleblower told Brisbane Times in 2017 the project had been blighted by management incompetence and communication and planning failures.

Mr Speziali said news of the liquidation of Areva Solar KCP in November had forced him to lay off seven workers and the litigation had reduced his business overall by about a third. In good times, the company employed about 60.

He said his experience should be a wake-up call for Australian businesses contracting with overseas companies on public projects such as the $50 billion submarine procurement.

“I’m just hoping that … they don’t deliver themselves up for the same sort of medicine that I have been dished out,” he said.

“How far up does it go, where does the buck stop?” asked Mr Speziali.

“Because obviously somebody does know what has happened here and it has been a catastrophe certainly from three years ago onwards, it has been nothing short of a catastrophe.”

Since 2017, the unused mirrors from the solar boost project have sat in neat rows at Kogan Creek power station. They had been intended to provide the coal-fired facility with superheated steam in a clean, green boost to its output that could have powered 5000 homes.

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CS Energy said it now owned the equipment left over from the Solar Boost project, including the mirrors. It said it planned to “safely dispose of” the equipment “and recycle (it) wherever possible”.

CS Energy acting chief executive Darren Busine said the company had “devoted considerable time and effort into exploring how we could reuse the equipment” since the project was cancelled in 2016.

Prior to 2017, Areva Solar had stored 3000 of the reflectors at a farm on the Warrego Highway owned by the Speziali family where Nortask is based. Nortask claimed in court it also had lucrative agreements with Areva Solar to move the mirrors to Kogan Creek – but ultimately did not do the work.

Mr Speziali said the decision to move the mirrors to the power station after the cancellation of the project had been “an exercise in futility”.

“That is just, pardon the French, taking the piss out of the people of Australia, the genuine people who pay tax in Australia,” he said.

“Fancy moving it from here to over there so that now, they’ve got to scrap them over there. It cost millions for that exercise, millions.”

CS Energy said it was “neither a party to, nor privy to, commercial arrangements between Areva and its subcontractors for the transportation of the solar reflectors to CS Energy’s Solar Boost site in 2016”.

In early 2015, Areva Solar KCP had tried to transfer ownership of the mirrors to Nortask, but Mr Speziali refused the offer after his research established they were just a liability, with the only option to scrap the mirrors at a cost of about $2 million.

“We tried every avenue. We had people from overseas visiting the premises having a look at it and they couldn’t make use (of them).

“Even if there was a neutral worth, you know, take ‘em away, charge me nothing – that was never the case. It was always a negative.”

In the Supreme Court, Nortask sued Areva Solar for unpaid rent, trespass and lost profits, telling the court Areva Solar KCP had initially told Nortask it wanted to store the reflectors for just a few months, then failed to collect them for three years.

In June, the Supreme Court in Brisbane ordered Areva Solar KCP to pay Nortask $600,000 plus legal costs. Nortask estimates it has spent a total of more than $1 million on the case.

Areva Solar KCP launched an appeal, still due to be heard in March, racking up further costs for both sides. But in November the company put itself into voluntary liquidation.

Company documents show Areva Solar KCP had $61 million in paid-up capital when it was formed in 2011.

In 2016, Nortask tried through the Supreme Court to force Areva Solar KCP to provide security against future legal costs, arguing that Areva was “impecunious”, had no assets in Australia and was planning to leave the country entirely.

Areva Solar KCP told the Supreme Court in October 2016 it had “paid up capital in many millions of dollars” and there was “no cogent evidence (it) would … be unable or unwilling to pay any judgment obtained by the plaintiff”.

The court accepted Areva’s arguments and imposed no requirement on it to maintain assets in Australia.

Against its assets of $5700 in cash, Areva Solar KCP has debts of $850,000, most of it owed to Nortask, along with a debt of $275,000 to the solar company’s immediate parent company, Areva Solar Pty Ltd, liquidator’s reports show.

The liquidator, Philip Campbell-Wilson of Sydney insolvency firm Grant Thornton, said he was investigating the activities of Areva Solar KCP and its directors and trying to establish exactly when the company became insolvent.

He said Areva Solar KCP’s parent in the US, Areva Solar Inc, had been co-operating with requests for documents but his investigations were still at an early stage.

Former Areva Solar manager Ian Canham told the Brisbane Times in 2017 the solar boost project had been blighted by management incompetence and planning failures, exacerbated by Areva Solar’s disparate chain of command, with decision-makers spread across Australia, the US and France.

The Supreme Court heard this year that Areva had tried to prevent Mr Canham from giving evidence in the Nortask case.

Mr Canham told the court he had received correspondence “from Areva through its solicitors ‘threatening to put a financial penalty on me for giving evidence’,”.

In her September 2018 judgment, Justice Ann Lyons said Mr Canham had been “particularly honest and forthright in exposing some of the failures in the Areva systems and processes at the time”.

“I note that Areva took steps to prevent Canham giving evidence in this trial in circumstances where he had refused to sign a confidentiality agreement,” she wrote in the judgment.

“I accept Canham’s evidence that he received a letter from Areva’s then solicitors … stating that he could suffer financial consequences for giving evidence. That such a letter was sent is a matter of serious concern.”

Justice Lyons found Mr Speziali to be a “canny and astute businessman”.

Brisbane Times put detailed questions to Framatome SAS in France, the ultimate holding company of Areva Solar KCP, as well as Electricite de France, which owns Framatome, and the France-based director of Areva Solar KCP, Sam Shakir.

A spokesman for Framatome declined to comment, citing the ongoing court proceedings.

Mr Shakir did not respond. Calls to Anthony Wiseman, the Australia-based director of Areva Solar KCP, were not returned.

Mark Solomons is an investigative journalist for Brisbane Times.

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