AWU sools corporate watchdog onto Palmer Nickel collapse

Clive Palmer could be investigated for potential breaches of federal law over the collapse of his nickel refinery.

Clive Palmer’s ‘Nickel’ plated Rolls-Royce. Picture: Lyndon Mechielsen

Clive Palmer could be investigated for potential breaches of federal law over the collapse of his nickel refinery after the Australian Workers Union called in the ­corporate watchdog.

Queensland Nickel sank into voluntary administration on Monday, throwing into doubt the company’s ability to pay redundancy entitlements to the 237 workers sacked on Friday.

AWU state secretary Ben Swan yesterday wrote to ASIC Commissioner John Price asking for an ­investigation into the entitlements, overdue superannuation payments and political donations from the refinery to the Palmer United Party.

“In the context of all that has ­recently transpired, the AWU is of the view that there is an open question as to whether the distribution of company money in the period before the appointment of the ­administrator is appropriate,” Mr Swan said in a letter obtained by The Australian.

“I am requesting that ASIC undertake an investigation into whether there may be any breaches of the Corporations Law, and whether Mr Palmer, as the sole shareholder of Queensland Nickel, may himself be acting in the ­capacity of a shadow director.

“I wish to stress the union and I are not making any suggestion of impropriety or malfeasance on the part of Mr Palmer, (nephew and managing director Clive) Mensink or company management.”

While Mr Palmer is QNI’s sole shareholder, he resigned as a ­director in February. Mr Mensink is the only director, but if Mr Palmer is found to have been acting as a shadow director, he may be liable for any breaches by the company.

Electoral records show QNI donated $21 million in the past two financial years to PUP, including nearly $290,000 late last year.

An Australian Securities & Investments Commission spokesman would not confirm whether ASIC was looking into QNI, but said it had spoken with voluntary administrators FTI Consulting, which are required to investigate whether directors had breached the law.

Jason Harris, associate professor of corporate law at the University of Technology, Sydney, said ASIC was able to investigate whether Mr Palmer if found to be a shadow director had breached his duties by putting QNI in financial distress.

He also suggested Mr Palmer might have breached a section of the Corporations Act that prohibits companies making “unreasonable” payments that benefit directors — introduced in ­response to bonuses issued before the One.Tel collapse in 2001.

Anger is growing in north Queensland after administrators revealed the company may not have enough money to pay redundancy entitlements.

If QNI goes into liquidation, ex-workers may be able to claim part of their redundancy entitlements — up to a capped amount — through a federal government safety net scheme called the Fair Entitlements Guarantee.

FEG was established after the collapse of National Textiles, chaired by Stan Howard, the brother of then-prime minister John Howard.

As long as the refinery remains in administration, redundant workers will be considered creditors and may have to wait in line to collect their entitlements. QNI is in debt to the tune of about $70m, with rail company Aurizon owed about $20m alone.

Queensland Premier Annastacia Palaszczuk flew to Townsville yesterday to meet Mayor Jenny Hill, and will hold a special cabinet committee meeting today to discuss the refinery crisis.

Additional reporting: Rosie Lewis