Corporate watchdog ASIC accuses Clive Palmer of $12.5m fraud

The corporate watchdog has charged businessman and former federal MP Clive Palmer with fraud. It has, for the first time, outlined its case against him.

Clive Palmer in Cairns for the Titanic II dinner at the Pullman Cairns International. PICTURE: STEWART MCLEAN

The corporate watchdog has charged businessman and former federal MP Clive Palmer with fraud, relating to two payments worth more than $12m during the 2013 election campaign.

The Australian Securities and Investments Commission charged resources billionaire Mr Palmer with four offences in February: two counts of dishonest use of his position of a director and two counts of fraud.

But ASIC has now revealed details of its case against Mr Palmer, who has vehemently denied any wrongdoing and says the allegations are “simply made up”.

ASIC alleges that during the 2013 federal election campaign - when Mr Palmer successfully ran for the Sunshine Coast seat of Fairfax - he dishonestly obtained a benefit by authorising payments worth about $12m, including to an advertising agency.

The watchdog says the payments could have benefited Mr Palmer’s political vehicle, the Palmer United Party (PUP).

“ASIC alleges that between 5 August 2013 and 5 September 2013, Mr Palmer dishonestly obtained a benefit or advantage for Cosmo Developments Pty Ltd and/or (PUP) and others by authorising the transfer of $10,000,000 contrary to the purpose for which the funds were being held,” an ASIC statement says.

“It is alleged that he dishonestly used his position as a director of Mineralogy Pty Ltd, a mining company owned by him, in obtaining that advantage.”

“ASIC also alleges that, between 31 August 2013 and 3 September 2013, Mr Palmer dishonestly obtained a benefit or advantage for Media Circus Network Pty Ltd and/or PUP by authorising the transfer of $2,167,065.60 contrary to the purpose for which the funds were being held. It is alleged that Mr Palmer dishonestly used his position as a director of Mineralogy in obtaining that advantage.”

Clive Palmer was charged by ASIC in February. Picture: AAP

The maximum penalty for dishonestly using the position of company director is $340,000 or five years’ jail. Aggravated fraud carries a maximum penalty of 12 years’ jail.

The matter was mentioned in the Brisbane Magistrates Court on Friday and adjourned until next month. Mr Palmer says he has applied for the charges to be withdrawn.

It has previously been alleged that Mr Palmer used some of the cash to help fund his political party’s federal election campaign in that year; Mr Palmer has always denied wrongdoing.

According to a civil court judgment cited by Mr Palmer, his estranged Chinese business partners CITIC Pacific — known in the Queensland civil court case as Sino Iron and Korean Steel — alleged the payments were made by Mineralogy in a breach of trust, assisted by Mr Palmer.

CITIC alleged the money was paid by the Chinese-backed company into a Mineralogy bank ­account that was supposed to be used for the operation of its port at the Sino Iron mining project in Western Australia, of which Mr Palmer is a partner. CITIC claimed Mineralogy and Mr Palmer had been dishonest and fraudulent.

Justice David Jackson examined the spat in the Queensland Supreme Court in 2014 and 2015. He decided that it was “not necessary to make a specific finding of dishonest or fraudulent design by Mineralogy, through (Mr Palmer), or of dishonest assistance with knowledge by (Mr Palmer)”.

However, he did find that both of the payments by Mr Palmer were “unauthorised”. He dismissed the Sino Iron and Korean Steel claims against Mr Palmer and Cosmo Developments.

The Australian broke the story in July 2014.

Mr Palmer said he was not concerned about the charges as “they are simply made up” and said Justice Jackson had ruled in his favour in May 2015, during a civil hearing of the allegations.