ASIC tells Clive Palmer to end delays

THE corporate regulator is turning the screws on Clive Palmer after his Federal Court loss to owners over his Coolum resort and dinosaur park.

THE corporate regulator is turning the screws on Clive Palmer after his Federal Court loss to owners over his Coolum resort and dinosaur park, which could end up costing him $30 million.

Mr Palmer, who is at war with the owners of villas at the Sunshine Coast resort, has been told the Australian Securities & Investments Commission wants no more delays and intends to proceed as soon as possible in a case shaping as an expensive disaster.

Lawyers’ correspondence, ­obtained by The Australian yesterday, shows Mr Palmer wants to delay his own appeal in the legal proceedings, after an adverse finding that would see the part-owners of villas at the resort paid out $65,000 each for their parcel.

The resources tycoon has appealed a Federal Court finding in favour of the villa owners two months ago that exposes him to being forced to pay as much as $30m to buy all of the owners out.

But Mr Palmer’s lawyers wrote to ASIC last week seeking to delay his appeal hearing until next year.

The owners and ASIC want the case wrapped up as soon as possible following a lengthy and costly period of being locked out of their villas and being hit with bills while seeing no revenue.

In their letter Mr Palmer’s team at Brisbane law firm HopgoodGanim told ASIC they would be “unable to brief a suitably qualified Senior Counsel” in time for November court sittings.

Hugh Copley, a lawyer for ASIC which is one of the parties in the case against Mr Palmer’s company, rejected this claim, and ­replied on August 14 that it was “inappropriate for further time, inconvenience and perhaps expense to be incurred” by delaying to early 2015.

Mr Copley said ASIC would “urge the (Federal) court” go ahead with the appeal in three months.

Mr Palmer’s resort and golf course have been starved of cash since soon after he took over three years ago. They were previously run by the Hyatt and employed about 600 staff until soon after he bought the once-iconic tourist destination.

More than 450 jobs have since been cut and occupancy has slumped to less than 5 per cent. A backlash over dinosaurs, rebranding, the loss of key managers, the withdrawal of the Australian PGA golf championship, and complaints from staff and guests have hit the resort.

Villa owners suspect there has been a strategy to run the resort down to make them give up on their assets there.

ASIC’s Takeovers Panel in July 2012 made a declaration of “unacceptable circumstances’’ against Mr Palmer’s resort-related ­companies.

The panel’s ruling effectively meant that he could not attempt to buy out owners for decreasing sums of money — instead, he would be obliged to offer to buy all the remaining shares on the same terms, as happens in a compulsory takeover offer, for $65,013 per ­parcel.

His company’s Federal Court appeal against the Takeovers Panel was dismissed by judge Berna Collier in June this year with costs awarded against him.

ASIC will be pressed to enforce orders that Mr Palmer’s companies buy all of the real estate and shares from the villa owners if his new appeal does not succeed.

The owners claim the “total purchase price would be in excess of $30m”, far in excess of the $7m he is understood to have paid to developer Lend Lease for the loss-making resort in 2011.

The owners have been warned by their advisers that Mr Palmer’s companies would be expected to “employ every possible strategy to avoid or delay being obliged to purchase”. Most of the villa owners hold a one-quarter share of a strata unit as well as shares in The Presidents Club, with both interests being ‘stapled securities’ that can only be sold together.