Clive Palmer has admitted using an email alias to direct investment decisions by his collapsed Queensland Nickel business but denied this made him a “shadow director” who could be liable for breaches of corporations law.
Palmer claimed he was entitled to rule on spending as member of a committee that oversaw a joint venture in which QN, a company with “no assets and no income”, merely ran the refinery.
In an interview with ABC program Lateline on Monday night, when asked how a company with no income could pay nearly 800 workers, the federal MP said it used “joint venture funds”.
It followed a report by ABC’s Four Corners that revealed Palmer personally authorised payments by QN including $2.5m to his flagship company Mineralogy, $350,000 to his failed Coolum resort, $738,770 to an overseas think tank and $220,000 for political advertising.
These were during the last two years when Palmer was not listed as a director.
Palmer approved the payments using an email address in the name of “Terry Smith”, which he said was set up originally so he could book restaurants incognito to avoid media attention.
He denied that QN, whose collapse has left almost 800 workers owed about $74m, traded while insolvent.
QN administrators FTI Consulting have already indicated that liquidation of QN, which their report to creditors on Tuesday is expected to recommend, will not cover staff entitlements.
Palmer said his companies that still owned the Yabulu refinery, QNI Metals and QNI Resources, would “eventually reopen” the Townsville plant and would “make announcements in coming months”.
FTI’s report will examine in part whether Palmer acted as a shadow director and whether the company traded while insolvent.
The Australian Securities and Investments Commission (Asic) is already running its own probe into these allegations, which if proved could expose Palmer to legal action.
ASIC’s website states that a person may be considered a shadow director “if you act as a director or give instructions to the appointed directors on how they should act”.
Such a person could be held liable for breaches of directors’ duties, which include acting “in good faith, in the best interests of the company (even where this may conflict with their personal interests) and for a proper purpose”.
Palmer said his rulings on QN spending were made by the committee under terms of a joint venture set in place in 1992 by then part-owner the Queensland government and continued under subsequent owner BHP.
“My role was set out in the joint venture agreement as a member of the joint venture committee to direct Queensland Nickel to make sure they complied with the terms of the agreement as a manager,” he said.
This included “monitoring spending”, he said.
Palmer said this role stemmed from being “only a member of a group of people which were employees of the company, not directors, and of course I’d previously been the CEO of the company, I had a knowledge of what things needed to be bought”.
Palmer rejected a request from his nephew Martin Brewster, the plant maintenance manager, for money on a safety check of an oil pipeline because there was risk of a leak.
He said he was “vindicated” as no oil leak eventuated. Lateline host Emma Alberici, who Palmer mistakenly referred to as “Anna” throughout the interview, reminded him this decision was made only in September.
Palmer said QN’s $738,770 payment to the thinktank Club de Madrid in 2015 came from “my own private companies, it didn’t come from Queensland Nickel’s own beneficial funds, it’s funds that were owned by the joint venture”.
“So just like you’ve got money in the bank and you spend your money, I can spend mine too.”
QN has also donated $20m to Palmer’s political party in the last two financial years, which he has claimed was in lieu of dividends he earned as owner.
Palmer said the first he was aware of QN’s financial trouble when the world nickel price crashed last October after an outside auditor signed off on company accounts in September showing a $73m surplus.
“I know Clive Palmer controls nearly everything but he doesn’t control the whole world commodity market, despite the ABC wishing he did,” Palmer said.
That was despite QN’s chief financial officer tendering an affidavit to a Perth court that Palmer knew of the company’s dire cashflow problems in August but ordered they be kept secret from senior management.
Asked if it was prudent to channel money from QN into Mineralogy, his fallen resort and a foreign thinktank without leaving a buffer for QN to weather a nickel slump, Palmer said: “I think a forecast of $73m is a pretty good buffer.”
“And I think it was OK when I put $2.6m of my own personal money in at Christmas so that the staff wages could be paid and they could all have a Christmas.
“I think it was OK when we gave away 53 Mercedes Benz to staff and they enjoyed that, and we gave 1,400 holidays away to Fiji for people that worked for us. I think all that was pretty good and the fact we paid our staff 25% above award, I think all that was good.
“Of course when things are good, you do what you can for the people. But when things are difficult … it’s not just us, 22,000 workers have lost their job in Queensland. We don’t see a Four Corner show about Rio [Tinto], about BHP.
“We don’t blame them, we just blame Clive Palmer.”
Alberici replied: “No because the owners of those companies, Mr Palmer, are not in elected office looking for voters to bring them back in.”
Palmer, who walked out on his last interview with Alberici, concluded by raising his two thumbs with a smile and declaring: “God bless Australia.”
