Clive Palmer has told a court an $8m payment to his father-in-law from his Queensland Nickel business in the years before its collapse may have been out of “love and affection”.
The former federal parliamentarian struggled to recall the purpose of that and tens of millions of dollars of other payments he ordered from the coffers of QN as he took to the witness box during a liquidator’s hearing in Brisbane on Wednesday.
This included $15m transferred to his personal bank account in Hong Kong, as well as another $15m to fund the operation of a former Club Med resort in French Polynesia he bought to turn into a “private retreat”.
The liquidator, FTI Consulting, is attempting to claw back money from QN’s collapse which left debts of $300m, including $70m to the federal government, and 800 workers jobless.
The liquidator has alleged Palmer used QN as a personal “piggy bank” but Palmer denies any impropriety. He has argued payments related to his other business interests were justified by the interrelationships within his corporate empire and a joint-venture structure that meant QN’s money was not its own.
Palmer, during an occasionally combative cross-examination with barrister Walter Sofronoff for the liquidator, repeatedly said he could not recall why he directed the transfer of payments from QN accounts, without reference to a journal he kept or company records.
An $8m payment to his father-in-law Alexander Sokolov may have been a loan or simply out of his “love and affection for him” but he could not be sure, Palmer said.
Palmer said Sokolov was an engineer from Bulgaria whose work over a number of months at QN’s Townsville refinery resulted in changes that saved the business $40m a year.
“$8m would have been worth his contribution, for sure,” Palmer told the hearing at the federal court.
Palmer said he could not recall why $15m earmarked for “operational funding” was required for his resort in Bora Bora.
The former Club Med resort had not traded since he bought it to turn it into a personal “holiday destination [to] pop over for a weekend”, he said.
Palmer said $15m transferred from QN to his personal account with the Standard China Bank in Hong Kong “paled into insignificance” beside the turnover of the nickel business, which he fully owned.
“I’m sure it was for a legitimate purpose,” he said.
Palmer said QN was not directly involved in an offshore resources project in Papua New Guinea held by another of his companies Palmer Petroleum, for which QN paid almost $8m to a company to conduct seismic exploration.
But the companies directing QN in the nickel joint venture would have decided the payment was in their interest, although he would need to refer to company records to “fully understand” what that was, he said.
Palmer at one point agreed with Sofronoff’s summary of his general proposition that it was in the commercial interest of Queensland Nickel and its parent companies, QNI resources and QNI Metals, for him to remain personally “solvent”.
After taking Palmer though a long series of large cash outgoings from QN that the former federal MP could not remember, Sofronoff asked: “How do you explain your failure of memory?”
Palmer replied he was in federal parliament “serving the Australian people” and “concentrating on how to make a better Queensland” after “we’d just got rid of Campbell Newman” as state premier.
Palmer said audited accounts and tax filings by QN’s parent companies, QNI Resources and QNI Metals would show cash flowed back into the nickel business.
This included $2.5m in QN staff wages he personally paid before Christmas 2015.
Sofronoff repeatedly accused Palmer of being evasive with his answers, at one point successfully seeking a direction from the federal court registrar, Murray Belcher, that the businessman respond directly to a question.
Sofronoff later chastised Palmer: “Just answer the question, please, you’re not here to make speeches.”
“I’ll answer how I want to,” Palmer replied.
“No, you’ll answer responsibly,” Sofronoff said.
Palmer then said he’d forgotten the question because of the barrister’s “loud voice”.
Sofronoff at another point accused Palmer of being evasive, asking him: “Do you want this to go on for a week?”
Other payments that Palmer could not immediately explain included $12.8m to his company Waratah Coal in September 2012, and $550,000 to his other company Mineralogy.
Neither could Palmer recall how QN came at one point to owe him personally $20m.
He and his nephew Clive Mensink, the director of Queensland Nickel, decided to invest millions from QN coffers into a collection of vintage cars because “we thought it was a good investment”, Palmer said.
The cars, “mostly from Denmark”, went on display at Palmer Coolum Resort on the Sunshine Coast, owned by his company Palmer Leisure, as soon as they cleared Australian customs, he said.
Palmer could not recall the precise nature of the work done by representatives of his ventures in China and Kurdistan, who were paid $4.5m and $1m by QN respectively.
The $4.5m payment was a “drop in the bucket” besides the “$15bn or $16bn” iron ore investment his company Mineralogy was involved in through a joint venture with Chinese partners in Western Australia, Palmer said.
