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Category: Clive Palmer / Business, Economics and Finance / Mining Industry

Administrators say Palmer's nickel company should be wound up

Tuesday, 12 Apr 2016 07:55:46

The Palmer Motorama Vintage Car Museum opened in November 2013 with 100 cars. (ABC News: Bruce Atkinson)

Clive Palmer instructed Queensland Nickel to pay him nearly $15 million and the troubled company spent millions more on vintage cars, a report by administrators has found.

Key points:

  • Creditors to vote on whether to liquidate Queensland Nickel, after administrators recommend it
  • Company owes about $74 million to sacked workers
  • Report says vintage cars were bought using QN bank account, which was never repaid

The report recommends liquidating the company and also points to a possible breach of fiduciary and common law duties by a director or officer of the company.

Sacked workers are owed $74 million, and if creditors agree to liquidate the company at a vote later this month, the workers may only see up to 52 per cent of the money paid out.

However, they would also be entitled to federal assistance.

Mr Palmer's nephew Clive Mensink, a former QN director, also claims the company owes him more than $270,000 in employee entitlements.

Furthermore, Mr Palmer has claimed he is owed $2.66 million for "outstanding loans."

The administrators, FTI Consulting, said that on November 29, 2012, Mr Palmer instructed QN to transfer $43 million out of the company to a number of entities, including nearly $15 million to himself.

The report also found that between August 2012 and June 2013 QN paid for vintage cars, which ended up at Mr Palmer's Coolum resort.

They were then sold to Mr Palmer for $5 million, however there was no record of the cash payment.

"A loan forgiveness transaction for $5 million was later recorded in the Mineralogy [another of Mr Palmer's companies] loan account on 30 June 2015," the report said.

Since 2013, QN had also made about $21.5 million in contributions to Palmer United Party.

"It is our view the donations made by QN to PUP have appropriated assets otherwise available to QN and its creditors for the benefit of a director-related entities, and because of these transactions, caused detriment to QN," the report said.

Bayard car owned by Clive Palmer Photo: A vintage Bayard car at Clive Palmer's Coolum museum (AAP: Crook PR)

Palmer 'may have acted as shadow director'

On Monday ABC TV's Four Corners revealed Mr Palmer approved millions of dollars in expenditure when he was not a listed director of Queensland Nickel.

Mr Palmer has denied operating as a shadow director at Queensland Nickel, which ran his Yabulu nickel refinery in Townsville before it was placed into voluntary administration.

However, the report said he appeared to have done so.

"Our observations indicate Mr Palmer, a former director of the company, appears to have acted as a shadow/de facto director of QN at all material times from February 2012 up to the date of our appointment on 18 January 2016 [excluding any tenure as appointed director]," the report said.

"Our investigations indicate certain persons appointed as a director, or whom may have acted in the capacity of a director, may have contravened sections ... of the Act," the executive summary read.

"We have identified significant transactions in value and quantum entered into by QN that appear to be both uncommercial and director-related transactions."

Prime Minister Malcolm Turnbull said the report could be the death knell for Mr Palmer's political career as federal MP for the Sunshine Coast seat of Fairfax.

"I would say, assuming he renominates, I think the electors of Fairfax will cast a very stern judgement on him," he said.

Palmer: Not my decision to delay entitlements

Mr Palmer said it was the administrators, not him, who decided not to pay workers' entitlements.

"On the 10th of March I had $23 million to inject into the operations," he said.

"He [the administrator] was required under the joint venture agreement to transfer the funds from the company's account to the new manager.

"He refused to do so. He decided to sack 550 people. He decided not to pay entitlements.

"This is a great scandal, misreported in the press right across the country, that I made a decision not to pay workers' entitlements. That is complete rubbish."

The FTI Consulting report also appointed independent environmental consultants to evaluate the refinery.

It identified "a number of areas of current non-compliance and identified that past external environmental audits had noted 15 minor non-compliance areas, which if left unattended could evolve into major issues".

External Link: Report recommending the liquidation of Queensland Nickel

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