Clive Palmer grilled on Singapore assets move amid $300bn lawsuit
Clive Palmer has been grilled over his decision to shift his Australian assets into a Singapore-based entity, as an international tribunal continued to hear the Queensland billionaire’s $300 billion legal claim against Australia.
Clive Palmer has been grilled over his decision to shift his Australian assets into a Singapore-based entity, as an international tribunal continued to hear the Queensland billionaire’s $300 billion legal claim against Australia.
In witness statements filed by Mr Palmer to the Permanent Court of Arbitration, the former MP said he had rushed to move the assets into his new Singapore business Zeph Investments in 2019 because of a desire to raise funds for his Australian coal project and to reduce tax obligations.
Under cross-examination by Solicitor-General Stephen Donaghue KC during a hearing of the court inside The Hague’s Peace Palace, Mr Palmer confirmed he had not raised coal finance or reduced his tax obligations after setting up Zeph.
Instead, he told the tribunal that the haste behind the establishment of the company was due to an opportunity at the time to purchase a Singapore shipping company.
“My decision was solely based that I wanted to get into that sector in Singapore; we knew the people they were dealing with, and we thought it only cost us a day or two’s income to do it,” he said.
Zeph is now suing the commonwealth in what is the largest investor-state dispute settlement claim in history, alleging Australia breached the terms of a free-trade agreement between the nations when Western Australia acted to kill off Mr Palmer’s legal claim against the state in 2020.
Back then, Mr Palmer had lodged a $30bn claim against WA over its blocking of his plans to develop another iron ore mine at Balmoral South in the Pilbara, not far from the existing Chinese-owned Sino Iron mine that delivers hundreds of millions of dollars each year to Mr Palmer.
The legislation was hatched in secret and swiftly passed through parliament. The year before that, Mr Palmer had moved his major Australian assets into Zeph via a swap of shares.
During Australia’s opening address on Monday, Mr Donaghue said Mr Palmer had moved his assets first to New Zealand and then to Singapore in an effort to secure international trade protections he would otherwise not be entitled to.
Mr Donaghue slammed Mr Palmer’s case as weak, absurd and demonstrably inadequate and said the magnate’s case was not supported by any contemporaneous evidence.
Mr Palmer, however, used his opening address to the tribunal to argue that the WA legislation was unforeseeable at the time he shifted the assets into Zeph.
“I was never of the view, and no one could have imagined, that a government could or would seek to change a state agreement other than by consent,” Mr Palmer said.
“If the respondent is truly making that submission on instructions directly from the government, it would have the most extraordinary and immediate consequences for the Australian economy.”
He said the 2019 deal to vend assets into Zeph was a result of the hostility of state and federal politicians to new coal projects, and the lack of financial support for such projects from Australian lenders.
Mr Palmer, who owns coal deposits in Queensland’s Galilee Basin, said the decision to move the assets to a Singapore entity was a matter of “choosing life over death” for those assets.
He said Australia needed to be brought to account for its multiple international trade breaches and its “flagrant disregard for the rule of law … If we effectively permit this kind of treaty breach to go unsanctioned, more and worse are likely to follow.”
The lack of documents to back up his arguments reflected his approach to business, Mr Palmer said.
He told the tribunal he took control of matters and made decisions based on his own judgment rather than by the “management by committee” approach taken by many large companies.
Mr Palmer denied that Zeph was a “sham” company set up for the purpose of providing an avenue to international trade dispute mechanisms.
“It is without doubt that the claimant’s commercial activity in Singapore is real and substantive,” he said.
“It’s not a shell, nor are its activities fictitious or imaginary or exaggerated. Rather they are proper, significant and increasingly valued in terms of both profit and revenue.”