The corporation managing the government’s $15 billion industry fund has agreed to review potential risks to the Commonwealth from its $32 million equity investment in a startup linked to an alleged privacy scandal.
Executives at the National Reconstruction Fund Corporation (NRFC) say they remain confident in their investment in Harrison.ai and that data privacy risks had been properly assessed in the lead up to it.
But the corporation’s new CEO on Thursday agreed to review aspects of it after admitting he was unaware of the privacy regulator’s serious concerns about the startup’s partner, I-MED Radiology Network.
I-MED has been the subject of inquiries by the national privacy regulator following reports it helped train Harrison.ai’s model using x-ray images without patients’ consent.
An investigation by Crikey last year revealed the startup may have trained its model on the scans of hundreds of thousands of patients without their knowledge, raising doubts about the use under Australian privacy law.
It led to Harrison.ai to distance itself from I-MED as the partner declined to respond to the publication’s questions.
The reports and the privacy regulator’s interest were on the public record by last September.
The NRFC finalised its $32 million equity deal with Harrison.ai shortly before it was announced in January this year, with other investors following on in a $179 million Series C two weeks later.
On Thursday at senate estimates, the NRFC executives faced questions about the deal and their knowledge of the regulator’s concerns.
“We looked at all of the governance factors associated with Harrison.AI, including data privacy and patient data, and we are comfortable with the processes that Harrison.ai has in place and we are comfortable with our investment,” NRFC chief investment officer Mary Manning said.
Greens Senator David Shoebridge said there are serious concerns about the data exchange.
“Here we’re talking about deeply private matters. Chest x-rays, radiological records [are] deeply personal matter that were taken without their consent and fed into Harrison.ai’s AI model,” Senator Shoebridge said.
NRFC CEO David Gall, who joined the corporation just days before the deal was announced, said the regulator’s concerns had not been brought to his attention and he was only made aware of them by Senator Shoebridge’s questioning.
In light of the information, Mr Gall said he will ensure the NRFC reviews potential risks to the Commonwealth from the investment and took on notice questions about the whether the NRFC board was aware.
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