$450k of Citic money paid to Clive Palmer’s lawyers

A LAW firm involved in many current and past legal cases for Clive Palmer has been one of the biggest recip­ients of Chinese funds.

Legal expenses.

A LEADING law firm involved in many current and past legal cases for Clive Palmer — including defamation actions against the Queensland Premier, Deputy Premier and The Australian — has been one of the biggest recip­ients of money from more than $12 million in Chinese funds alleg­edly wrongfully siphoned from a bank account.

The Brisbane firm HopgoodGanim figures prominently in Federal Court documents as the recipient of hundreds of thousands of dollars last year from the bank account, into which about $23m had been deposited by ­Chinese company Citic Pacific, for reasonable costs of operating a port at Cape Preston in Western Australia.

The numerous withdrawals of funds from the bank account, which is ultimately controlled by Mr Palmer, are the subject of an ongoing and secret investigation in closed-door arbitration proceedings being run by retired Queensland Supreme Court judge Richard Chesterman QC.

HopgoodGanim lawyers are representing Mr Palmer and Mineralogy over the disputed funds case, which is likely to be ­referred to police.

The Chinese are involved in a “searching inquiry’’ that is pres­sing Mr Palmer to show where funds — including sums of $10m, withdrawn in August last year, and $2.167m, taken from the same account in September — went during last year’s federal election campaign, in which the ­resources tycoon is reputed to have spent more than $15m fielding candid­ates.

Lawyers for Citic Pacific have told the Federal Court that these funds could not have been legitimately spent on management of the port, which was built to ship iron ore mined by the Chinese company from tenements controlled by Mineralogy.

The $10m and $2.167m were claimed in a one-line explanation by Mr Palmer’s company, Mineralogy, to be the cost of “port management services”.

However, Mineralogy has not been operating the port and is not in charge of the port.

Mr Palmer, who has strenuously denied there has been any wrongful siphoning of money, ­insisted this week in an interview with the Sky TV broadcasters Graham Richardson and Alan Jones that the $12m had been put back into the account, adding that he had not had any contact with police and was unaware of any police interest.

Mr Palmer has described The Weekend Australian’s reporting as “completely false” and part of a campaign “to undermine me and the Palmer United Party because the party soon will assume the balance of power”.

Court documents seen by The Weekend Australian show six cheques, totalling $1.15m, were ­deposited between September and December 9 last year, but ­documents for this year have not been disclosed and Mr Palmer has refused to provide statements showing he has put back the $12m.

An insight into the seriousness of the dispute in closed-door proceedings has been provided by the filing in the Supreme Court in Brisbane of documents that show some actions to date of Mr Chesterman, including authorisation of legal orders and subpoenas to force disclosure of all transactions on the bank account.

Separate affidavit material ­examined by The Weekend Australian in the Federal Court in Perth has highlighted “undocumented legal expenses’’ as one of the biggest single reasons for the flow of money from the NAB ­account last year and in the last three months of 2012.

The Federal Court documents show that HopgoodGanim, as solicitors for Mineralogy, were paid more than $450,000 with cheques drawn on the bank account ­between March and December last year for legal costs related to disputes with Citic Pacific over matters including iron ore royalties, which Mr Palmer has demanded he be paid. Rebecca Lee, counsel for Mineralogy in the royalty proceedings, received more than $180,000 with cheques drawn on the bank account ­between September 2012 and ­November last year.

The Federal Court has been told by lawyers for Citic Pacific that there was no proper authorisation allowing Mineralogy to make such payments. Funds in the account are meant to be spent only on matters directly related to the actual operation of the port.

The evidence in the Federal Court shows that in Brisbane last year the law firm received $32,149 on September 2; $174,669 on June 17; $147,652 on May 23; $23,500 on May 10; $41,501 on April 8; $29,767 on March 13; and several ­additional, smaller sums.

An affidavit states that “Mineralogy has not disclosed a remittance advice or invoice’’ (to Citic Pacific) for those amounts.

Mineralogy had also not disclosed any remittance advice or invoice to Citic Pacific for amounts of $2888 and $1708 paid to the Supreme Court of Western Australia or $3,177 paid to law firm Ashurst Australia or any of the sums paid to the Perth-based barrister for Mineralogy, Rebecca Lee.

The affidavit states that “none of these payments is shown in the ‘payment ledger’, however, all are recorded in the ‘bank register’. Each of these payments has been cleared from the Bank Account as evidence by the bank statements’’.

Subpoenas have been issued to the NAB, which administers the bank account for Mr Palmer’s flagship company, Mineralogy, as well as Knight Frank (Australia), the landlord for the Perth premises of both Mineralogy and his Palmer United Party, to hand over documents.

The Weekend Australian sent a list of questions to two of the partners of HopgoodGanim, who have been involved in litigation on behalf of Mr Palmer and Mineralogy. The law firm is also acting for Mr Palmer in his defamation action against the newspaper and this reporter.

In a legal letter to The Weekend Australian’s lawyers yesterday, one of the partners, Liam Prescott, said: “We object to Mr Thomas writing directly to our firm. The only response we are able to provide in the circumstances is to advise that our firm has at all times acted in accordance with our legal and ethical obligations.”