Clive Palmer’s claim that Queensland Nickel was denied a $25m bailout on the “instructions of the prime minister” was challenged as the federal court heard that Australia’s major banks rejected the loan plea the month before Palmer met Malcolm Turnbull.
The tycoon also said he suggested his nephew and Queensland Nickel (QN) managing director, Clive Mensink, “wipe his arse” with a proposed letter to the Queensland treasurer amid talks for loan guarantees because a former deputy premier had told him the state government “had decided to sink us regardless”.
On a combative third day of interrogations over QN’s collapse, Palmer separately launched a high court bid to stop liquidators questioning him beyond this week.
Palmer, pressed by the liquidator’s examiner, Tom Sullivan, about his awareness of a $13m debt to Aurizon on which QN defaulted on 27 November last year, claimed the rail company was being a “paper tiger” and “bluffing” when it was happy to explore deferred payments.
The debt default was alleged by QN’s administrators to be the point at which the company traded while insolvent, a concept Palmer said he was familiar with only through “reading books and the Financial Review”.
He rejected as “bullshit” the contention that QN was unable to meet due debts as early as September, when he attended meetings with the four major banks to try to secure a $25m loan for QN.
The meetings took place days after Palmer was given internal QN charts showing a cashflow shortage of $13m, in what Sullivan labeled a “systemic deficit” forecast to continue until April 2016.
Palmer also denied ordering the sackings of 200 QN workers before its collapse, despite texting an executive to request a “confidential” costing of the redundancies a month earlier.
He said it had been a decision for Mensink, to whom he gave directions only on “strategic” issues affecting all cash and property held in trust by QN for its parent companies, wholly owned by Palmer.
The court heard an email from a National Australia Bank officer in September had flagged the bank’s refusal to lend to QN against the claimed $1.9bn in assets held by its parent campanies, but was open to exploring options if Palmer personally put up “liquid” assets.
Palmer said his personal assets included his Brisbane corporate headquarters worth up to $25m but he decided not to put up his own security because he’d formed the view there was a conspiracy by governments to put QN out of business.
He said the former Queensland deputy premier Jim Elder had told him of a collusion with unions and the state government to this end.
Turnbull had told Palmer, “how can we put money in when you own it, Clive?” and that he would speak to the banks to dissuade them from lending, Palmer claimed.
Sullivan pointed out that Palmer had met Turnbull on 9 October but the rejection from the banks came on 18 and 19 September, shortly after his meetings with them.
Palmer said he went to up to five meetings with the state government about getting their guarantee for a QN loan but was there as “the member for Fairfax … really as a parliamentarian concerned about the impact on the Queensland economy” of QN’s downfall.
Sullivan asked Palmer if he wasn’t “also there as 100% beneficial owner” of the QN group companies.
“No I don’t think so,” Palmer replied.
Sullivan asked if an email from Mensink to Palmer seeking approval for a draft letter to the state treasurer amid guarantee negotiations detailed his nephew’s concerns “about his position in relation to insolvent trading”.
Palmer said again he “didn’t think so”, saying QN had the option of temporarily shutting down the refinery until the flagging nickel price recovered.
Palmer’s reply to Mensink’s email was: “I told you what to do. Do it. Do not send me anything to cover your arse or you fuck everything. Do not contact me by email again.”
Palmer told the court he could not recall what he had asked Mensik to do as that was nine months ago and “I’m 62 [years old]”.
“I think I might have told him to wipe his arse with [the letter] but I can’t remember,” he said.
Palmer then said what he meant was that Mensink was “wasting his time” with the government in light of Elder’s warning.
“I saw this sort of a letter as a face-saving opportunity for the government, a pointless letter to send.”
Telling Mensink not to email him reflected the fact discussions about the ailing QN were serious and should be done “face to face”, Palmer said.
Palmer was also grilled over whether he was bankrolling a European vacation that has kept Mensink absent during federal court examinations.
Palmer said Mensink, who was last said to be on a Helsinki to St Petersburg cruise, continued to work for his now-mothballed refinery joint venture and draw a salary.
Asked by Sullivan whether Palmer or his companies were directly paying for any of Mensink’s travel expenses, the former federal MP said: “Not that I’m aware of.”
Palmer, who last week undertook to find out when Mensink planned to come back to Australia, said they had spoken again in the past two days but his nephew still had not indicated a return date.
QN’s winding up in April has left almost 800 jobless and debts of about $300m.
Administrators FTI Consulting, now QN’s liquidators, alleged in a creditors report that Palmer had acted as a shadow director of QN and that he and Mensink had appeared to act “recklessly” in possible breach of the Corporations Act.
FTI flagged the possibility of recovering “unreasonable director related transactions”, with $189m in loans from QN coffers to parties related to Palmer being “forgiven” by the company since June 2012.
Liquidators are also using the hearings to probe for evidence of insolvent trading as alleged by administrators. Such a finding could expose Palmer and Mensink to legal liability.
Palmer has denied any wrongdoing and continued on Thursday to insist he was entitled to direct QN staff on spending and contracts as an authorised delegate of a committee representing QN’s parent companies as the refinery’s joint venture owners, .
Palmer said he often directed Mensink on matters such as contracts but did so not as an individual, but on the committee’s behalf.
Mensink was the only other member of the committee.
