While Queensland Nickel’s former managing director Clive Mensink was said to be on an Arctic cruise to St Petersburg, his uncle Clive Palmer was sweating it out in a federal court interrogation.
Hours into an examination over the collapse of his company QN – an appearance Palmer twice tried avert through unsuccessful legal applications – he momentarily lost his cool, exhorting his questioner: “For God’s sake, lift your game.”
Palmer was reacting to the suggestion by barrister Tom Sullivan that emails from Mensink seeking his approval on QN contracts and negotiating tactics showed he was “heavily involved” with the company.
“Absolutely not. You’ve got to be joking,” Palmer thundered. “This is a company with a $600m turnover every year, employing 1,000 people and you think I’m heavily involved, because I approved one contract – you’ve got to be joking.
“I never visited Queensland Nickel more than three times in three years. What a lot of rubbish, absolute rubbish. It’s rubbish. Ha ha.”
When registrar Murray Belcher pulled Palmer up over the “inappropriate” comment towards Sullivan, the tycoon and one-term federal parliamentarian apologised.
It was one of the occasional outbursts amid Palmer’s tireless mantra that every direction he made to management of the ill-fated QN was not coming from him personally.
Palmer’s instructions to management ranged from the insistence he approve every purchase over $500, to threatening staff dismissal over the selection of an office printer, the court heard.
Amid Palmer’s concerns about espionage after what he says police suspected was an IT attack on his parliamentary office by Chinese hackers, he told the court that he even forbade QN staff from taking home mobiles or laptops without providing a plausible reason.
All instructions, Palmer insisted, were given in his capacity as the chairman and secretary of a joint venture owners committee (JVOC) that controlled all decisions on spending and property by QN. The JVOC is a committee, under a company structure in place since 1992 when the state government was a shareholder in the business, which Palmer said was set up to supervise the refinery manager - QN - in its deployment of assets held by the parent companies.
QN, which has gone into liquidation owing $300m and leaving the commonwealth to pick up the $65m tab for the entitlements of almost 800 sacked workers, merely managed the Townsville refinery business.
It had no cash or assets of its own, Palmer insisted.
This was despite the court hearing during the week that the bank account that held all the operating funds – from a $26m cash injection from Palmer’s Mineralogy company into a struggling QN in 2013 to staff wages – were in QN’s name.
The structure of the venture was such that all property, including the cash in QN’s own accounts, in fact belonged to QN’s two parent companies, wholly owned by Palmer, the tycoon attested.
Importantly, despite all of Palmer’s directions given under his email alias “Terry Smith” to Mensink and others, he denies that he was in effect acting as a director of QN.
Such a finding could open Palmer to civil or criminal penalties if QN was found to be trading while insolvent – operating while unable to pay its debts – as well as the pursuit of “director-related” payments he or his companies received from QN before its collapse.
Lining up beside creditors owed tens of millions of dollars is the federal government, which appointed the special purpose liquidator that engaged Sullivan.
Palmer’s mantra that all of his involvement in QN’s affairs stemmed from his joint venture owners committee hat appeared to repeatedly test Sullivan’s credulity.
For one thing, the committee consisted solely of Palmer and Mensink, who the court heard was usually on the receiving end of his uncle’s instructions while wearing his QN managing director “hat”.
Palmer told the court he had “sole authority” to pass committee resolutions, in some cases by simply jotting down his ideas – always in pencil – in an out-of-date green annual planner that he carried with him everywhere.
Such was the mechanism by which Palmer was able to direct the company to plough cash into his other ventures – including property developments and golf courses – forgive loans from QN coffers and make millions of dollars of donations to his political party.
In one memorable anecdote, Palmer described a key resolution shortly before QN’s collapse that it seek company administration and a line of credit as being the result of “a meeting with myself”.
Sullivan asked him if it was not the case that JVOC resolutions represented his “internal musings” through pencil on paper.
“No – this was serious,” Palmer replied, declaring that the word “musings” implied it wasn’t.
Palmer pointed out his authority to direct QN management applied “only in respect of joint venture property, not their own property”.
What property of its own did QN have, Sullivan asked.
“At that time none,” Palmer said.
Sullivan asked Palmer why an email from Mensink attaching a supply “contract for your approval at US$22 a tonne” was “not him seeking your approval”.
“That’s you, isn’t it?” Sullivan said.
“No, that’s the joint venture owners committee,” Palmer replied.
“You are the joint venture owners committee.”
“I’ve told you what it is.”
In one of a plethora of exchanges about the difference between Palmer the individual and Palmer the representative of the JVOC, Sullivan asked the tycoon: “You see this as a distinction, do you?”
“I do, yeah.”
Another time as the barrister strove to unpack this distinction, Palmer reminded him: “Everytime, I’ll take you back to it. I can be here for a year if need be.”
Few who witnessed Palmer on his first full day in a grilling by a liquidator’s lawyer would doubt that he could be there for a year and continue to maintain that his actions were a function of his duty as chair of the JVOC, and not a desire to covertly exercise the powers of a director as suggested by the administrators in their report to QN creditors.
Palmer’s dogged insistence that his unilateral actions represented the will of the JVOC and not his personal will was varied only by occasional reminiscences about his recently ended parliamentary career and his intensely personal motivations for shedding his status as the major Liberal National party donor to seek elected office.
“I didn’t like Campbell Newman and I wanted to be involved in political activity to get rid of him,” Palmer said.
The other motive was to defeat the Gillard government’s proposed carbon tax, which would have cost his nickel refinery business a “projected $75m” meaning it “wouldn’t have a future”.
Palmer said his preoccupation with his political career was such that he had no idea whether a $27m injection into QN from his flagship Mineralogy company – which enriched him by selling iron ore to Chinese partners with whom he’s now locked in a bitter royalties dispute – was even repaid.
“I was in parliament, we just had the balance of power in Australia. Tony Abbot was upset. It was the last thing I was thinking about,” Palmer said.
What remains unclear is how long the expected legal action by liquidators to try clawing back QN’s debts from Palmer’s companies or his other portfolio of assets would drag out.
It is also unclear when Mensink, who Palmer said was in Berlin when he last spoke to him by phone, will return to answer his share of questions as sole director of a company circled by creditors.
Mensink, as a listed director of QN, would potentially risk legal pursuit by the Australian Securities and Investments Commission if the company were found to have traded while insolvent.
The court heard earlier this week that the former QN chief financial officer Daren Wolfe had prepared a cashflow forecast last September showing the company was unable to pay a $6m debt to rail company Aurizon that had fallen due.
Palmer told the court on Friday that he was aware of a “cash deficit” after meeting with Wolfe around that time but he was not told about the company being unable to service its debts as they fell due.
Palmer agreed to call his nephew this weekend and ask when he planned be back in Australia.
He would relay Mensink’s response when Palmer resumed his grilling in court on Monday – as long as he was able to get in contact with his nephew, he added.
