Clive Palmer accused of taking millions

CHINESE giant Citic Pacific has accused Clive Palmer’s private company of taking millions of dollars from a special fund without authority.

Palmer accused of taking millions

CHINESE giant Citic Pacific has accused Clive Palmer’s private company of taking millions of dollars from a special fund without authority as it labelled the federal MP’s bid to shut down its Australian subsidiary as one of the most “flagrant abuses” of its type.

Mr Palmer’s Mineralogy has accused the Citic Pacific-owned Sino Iron of failing to contribute $13.4 million to an administrative fund set up several years ago, claiming its estranged business partner should be liquidated on the grounds of insolvency.

Citic — China’s biggest conglomerate — responded by lodging an application with the Federal Court in Perth to dismiss the attempt to wind up Sino Iron, the company behind a $10 billion iron ore export project in the Pilbara.

The counsel for Citic, Andrew Bell, told judge John Gilmour yesterday that Mineralogy had spent $2.5m from the project’s administrative fund on a vessel when “our understanding is that such a vessel was never acquired”.

Dr Bell also said Mineralogy took $2m from the fund for port security costs but those costs were not incurred because Mineralogy was not engaged in such a role at the time.

He said Mineralogy did not have the authority to draw on the funds and he believed that the money was owing to his client.

Dr Bell said Mineralogy’s wind-up application should be dismissed as an abuse of process, describing it as one the most flagrant abuses of a wind-up application the Federal Court had ever heard.

Citic said last week that the escalating battle against the state-owned company was being closely watched by Chinese companies considering investments in Australia. Mr Palmer said last week he would not stand by and see “Australian interests raped and disrespected by foreign-owned companies”.

Dr Bell told the court yesterday Citic was prepared to have the matter heard as soon as possible, which led Justice Gilmour to suggest a hearing next Tuesday. The lawyer for Mineralogy, Rebecca Lee, said that would not leave the company enough time to brief a barrister.

Justice Gilmour dismissed the objection, saying it seemed unreasonable for Mineralogy to complain that Citic wanted the matter heard sooner rather than later.

The latest legal stoush between Mr Palmer and Citic is part of a wider war over the Sino Iron project, which is built on tenements originally owned by Mineralogy.

The parties have fallen out over the amount of royalties owed to Mr Palmer and are engaged in a fight for control of the project.

The Sino Iron project began exports late last year, but it was four years behind schedule and more than $US6bn over budget.

Citic is also set to appeal a decision last week by the Federal Court that designated Mineralogy as the operator — for security purposes — of the Sino Iron project’s port.

Yesterday, Justice Gilmour referred to the “fanfare of publicity” in which Mineralogy’s latest proceedings to wind up Sino Iron were launched last week.

The court action became public after Mr Palmer issued a press release last Friday in which he suggested that Sino Iron was unable to pay its debts without the support of Citic.

However, Ms Lee told Justice Gilmour yesterday that the press release was only published in response to inquiries from a journalist.

Justice Gilmour granted an injunction preventing Mineralogy from proceeding with its wind-up application. The matter will be heard on Tuesday.