A Queensland Nickel executive who sought a $500,000 “commercial” loan from his “old friend” Clive Palmer and was advanced the funds by QN, refused to repay the company upon its collapse because “it [QN] had no money” of its own.
A federal court hearing into QN’s demise heard on Thursday that the company paid the money to Ian Ferguson, its then managing director of operations, in July 2014 after Palmer agreed to the loan.
Ferguson also signed a contract with QN to repay the loan within five years, with the first instalment due in 2017. Creditors who were owed about $300m voted for QN to be wound up in April.
But when QN’s liquidators, FTI Consulting, sought repayment of the loan in May, Ferguson refused, citing a joint-venture structure for the refinery business in which all money and assets belonged to QN’s two parent companies and not QN.
Ferguson claimed he had no obligation to repay QN, instead his agreement remained with the joint venture parent companies and Clive Palmer – and that the loan repayment term remained due to commence in May 2017.
Cathy Muir, a lawyer acting for special purpose liquidators PPB Advisory, said to Ferguson: “What you’re saying is you really borrowed the money from Mr Palmer or [QN parent companies QNI] Resources or Metals.”
“That’s what I’m saying,” Ferguson said.
The court also heard that QN paid Ferguson $3,850 a month for consulting he did on property developments for Palmer entirely separate to QN operations.
Muir asked Ferguson why – as an experienced businessman who had been a director of 63 companies since 1977 – he did not sign a loan contract with the parent companies instead of QN.
“Perhaps I should have but I didn’t because I knew funding was coming from those two [parent] companies,” Ferguson said.
Ferguson agreed with Muir that, according to the terms of the loan contract with QN, the “money became repayable” once he stopped working for QN.
But he said his obligation was to repay Palmer or the QN parent companies.
Despite being a director of all three companies for 10 months in 2013, Ferguson said he did not know whether the parent companies had separate bank accounts to the QN one from which he was paid.
The hearings continue, with Palmer due to be examined under oath on Friday.
