It has since emerged Paladin founder, Craig Thrupp, has left a string of bad debts and failed contracts across Asia, a track record that would usually make the government wary of awarding him such a lucrative contract.

The Financial Review has also been told Home Affairs took the highly unusual step of making an advance payment of around $10 million to Paladin, as the company did not have the money to begin the contract.

Company filings show Paladin was set up with capital of just $US50,000, insufficient to fund the start-up costs for such a contract.

Government contractors are typically paid 60 days after delivering the product or service.

When asked about the advance payment made to Paladin and the tender process for the contracts, Home Affairs said it "has nothing further to add to our previous response".

The department previously said it was aware of the allegations made against Paladin as part of a court dispute with the former chief executive of its PNG business, Craig Coleman.

Claiming a short time frame as the reason for not running an open tender process is suggested in court documents tendered by Mr Coleman.


He said in August 2017 he was contacted by Paladin asking for "urgent" assistance with the Manus tender.

Paladin founder and shareholder Craig Thrupp pictured in Bali.

Government tender documents show Paladin was awarded its first contract with Home Affairs just a month later.

This apparent urgency came despite Home Affairs being told in April 2016 that its main Manus service provider, Broadspectrum (previously Transfield Services) wanted to cease work at the offshore centres.

Home Affairs, therefore, had at least a year to find a new contractor but the court documents indicate an approach was only made to Paladin two months before the Broadspectrum contract was due to finish.

David Mayo, a Canberra consultant and expert in government contract preparation, said he helped Paladin prepare its proposal.

In July 2017, two months before Paladin submitted its bid, Mr Mayo founded the company Dreamtime Indigenous Services. A month after incorporating the company he left his job at multinational arms contractor Northrop Grumman.

While confirming he worked with Paladin on its Manus proposal, Mr Mayo refused to discuss why in November 2017, two months after Paladin won its first contract, a 40 per cent stake in Dreamtime was transferred to Paladin Singapore.

That holding was later transferred to companies controlled by Paladin shareholder Ian Stewart and Mr Thrupp's father Trevor, a former air force pilot and Queensland businessman.