Official contradicts Clive Palmer’s claim that $12m was spent on port services

CLIVE Palmer could not have spent millions in Chinese funds on “port management services”, an affidavit states.

Clive Palmer leaves the Palmer United Party’s offices in Canberra yesterday.

CLIVE Palmer could not have spent more than $12 million in Chinese funds on “port management services” because his people were not at the port nor doing such work, according to a master mariner and a China-owned company.

Ralph Larbey, who ran the remote West Australian port of Cape Preston, makes the claims in a fresh Supreme Court affidavit.

The Palmer United Party leader has insisted that the funds were spent legitimately.

Two cheque withdrawals of $10m and $2.167m from a National Australia Bank account during Mr Palmer’s federal election campaign last year have been described as “fraudulent and dishonest” by his commercial partner, the Chinese government-owned company Citic Pacific, in an ongoing legal case. The $2.167m went to Brisbane agency Media Circus Network, which booked and placed PUP’s election advertising, while the $10m was funnelled in August last year to Cosmo Developments, which was controlled by Mr Palmer. His company told heads of the Chinese company their money was spent on “port management services”.

Mr Palmer’s lawyers have responded to the claims of fraud and dishonesty, which are likely to be referred to police, by insisting that his company, Cosmo Developments, was formally contracted by another of his companies, Queensland Nickel, to do work at the port.

Citic has described a “port services agreement” document between the two Palmer-controlled companies as a “sham”, littered with “gobbledegook” and put together in “extreme haste” — possibly after The Australian on May 8 reported in detail on the missing $12.167m.

Mr Larbey, who has 36 years’ experience in the shipping and resources industry, said he worked for the Chinese side as managing director of the Cape Preston Port Company between September 2012 and February this year, and dealt with all operational and regulatory matters for the port.

He oversaw three managers based at the port and four managers in the Perth office as part of his responsibility to operate and maintain the infrastructure and marine assets at the port and meet all regulatory needs.

“At no time during my tenure as managing director for Cape Preston Port Company did any representative of Cosmo Developments Pty Ltd initiate contact, verbally or in writing, directly or through (Mr Palmer’s company) Mineralogy Pty Ltd to seek access to the port,’’ he said in his August 18 affidavit.

He said the managers who reported to him were responsible for overseeing construction requirements for the port, the commissioning of equipment and facilities, and the hiring and training of staff. These managers were not employed by Mr Palmer’s company and did not have any ties to him.

Mr Palmer’s top executives, including his own manager, Paul Robinson, have acknowledged they were not running the port.

Mr Robinson was unaware of the $10m payment, while his budget “made no provision for a payment to Cosmo”.

In its newest legal statement of claim in the Supreme Court, lawyers for Citic have alleged Mr Palmer had “signed the cheques in favour of two companies that were not involved in the provision of port management services; (and) he knew Mineralogy was not in possession of the port in the second half of 2013. He knew that Mineralogy had not budgeted for expenditure of $12m for Port Management Services in the second half of 2013; and (he) has publicly acknowledged (under questioning by The Australian’s David Crowe at the National Press Club on July 7) that the payment to Media Circus at least was for advertising.’’

The action against Mr Palmer seeks a declaration from the Supreme Court that he “dishonestly procured or was involved in” a breach of trust by his company, Mineralogy, and that the company’s conduct was “dishonest and fraudulent”.

Mr Palmer’s lawyers have described the allegations as baseless and an abuse of process. They are seeking to have them knocked out of court this month. Mr Palmer has rejected claims of wrongdoing, and in a tirade on the ABC’s Q & A last month he described the Chinese as “mongrels” and “bastards”.

He apologised after a backlash from the public and pressure from his senator Zhenya Wang.