KPMG challenged over Palmer report

Liquidators of the collapsed Queensland Nickel have disputed the accuracy of a report by top financial advisory firm KPMG.

Clive Palmer. Picture: Alix Sweeney

Liquidators of the collapsed Queensland Nickel have disputed the accuracy of a report by top financial advisory firm KPMG used in Clive Palmer’s defence in Supreme Court proceedings.

KPMG has been ordered via subpoena to produce documents used to prepare a report based on talks between Mr Palmer’s nephew, Clive Mensink, and Queensland Treasury that took place shortly before the Townsville nickel refinery’s collapse in Jan­uary 2016.

In October 2015, Mr Mensink, who was the director of QNI, asked the Queensland government to guarantee a bank loan that could allegedly have kept the cash-poor company afloat.

The general purpose liqui­dator and the special purpose ­liquidator appointed by the govern­ment to claw back taxpayer funds paid out to sacked QNI workers have disputed claims made by Mr Palmer and other defendants in the liqui­dation matter that are based on KPMG advice.

The defendants are relying on the report to form part of their ­defence.

The liquidators say the report was influenced by QNI bosses, who provided “instructions and inputs” in its preparation.

According to the defence submitted by the defendants, when it became obvious in late 2015 that QNI was struggling for cash flow, the business explored various funding options.

This included meetings with prospective lenders, including Westpac and National Australia Bank. According to the court documents, NAB advised that it would be prepared to loan funds to QNI if it were to be backed by a government guarantee.

On October 12, 2015, Mr Mensink and former QNI chief financial officer Daren Wolfe met then state under-treasurer Jim Murphy and KPMG partner Dennis Molloy.

Mr Murphy allegedly told Mr Mensink that the government could not lend funds until QNI co-operated with a review by KPMG. Using forecasts of nickel prices, KPMG concluded that the business had a cash flow issue until April 2016. The liquidators have questioned the account of the meeting with Queensland Treasury representatives.

Mr Mensink has been in Bulgaria since the refinery collapsed.