Chinese target Clive Palmer’s bank

CLIVE Palmer’s bank and the Perth landlord of his party are being ordered to disclose financial details as part of a secret legal action.

CLIVE Palmer’s bank and the Perth landlord of his Palmer United Party are being ordered to disclose financial details and key documents as part of a secret legal action over the allegedly wrongful siphoning of more than $12 million from a global company that is owned and run by the Chinese government.

The legal action in Queensland orders co-operation from the Nat­ional Australia Bank, which had held the Chinese funds in an ­account controlled by Mr Palmer’s company Mineralogy and one of his PUP candidates, Vimal Sharma.

The action forms part of an escalating dispute between Mineralogy and China’s Citic Pacific, which has accused Mr Palmer’s company of siphoning $12m from an account that was created to fund the operation of the Cape Preston port in Western Aus­tralia’s Pilbara region.

The Australian revealed last month how major withdrawals of $10m and $2.167m during Mr Palmer’s costly federal election campaign resulted in the account being almost completely drained without a proper explanation for the expenditure. Mr Palmer ­denies any wrongdoing.

Documents obtained by The Australian yesterday from the Supreme Court in Brisbane show the secret legal action, unfolding in closed-door arbitration proceedings, has spilled into the public arena with subpoenas issued to the bank, Knight Frank (Australia), the landlord of the Perth headquarters of the PUP and Mineralogy, and two other entities.

An affidavit filed by Geoffrey Rankin, a solicitor for the Chinese companies, discloses that the head of the confidential arbitration proceedings, retired Supreme Court judge Richard Chesterman QC, gave “permission to issue the subpoena”.

Mr Rankin also disclosed a portion of the interim award made in arbitration “redacted to maintain confidentiality”.

His affidavit states that the documents are being sought as “evidence for the hearing of the ­arbitration proceeding”.

Mr Palmer and Mineralogy are coming under increasing pressure to provide information about cheques in the amounts of $10m and $2,167,065.60 drawn in Aug­ust and September last year, which were described in the bank register as being for “Port Management Services”.

The NAB account responsible for the cheques was set up by Mineralogy, from which Mr Palmer formally resigned as a director last month amid increasing scrutiny of the money trail in confidential arbitration proceedings.

The investigation of the money trail is being escalated by Citic Pacific, which has spent almost $10 billion on a project based on Mr Palmer’s iron ore tenements in Western Australia. A police investigation is likely to be started when all documents have been handed over.

The landlord of the Perth-based premises of PUP, which Mr Palmer founded in his quest to become prime minister, is being ordered to disclose many documents relating to all rent it has received from the resources tycoon’s companies. The premises are shared with Mineralogy in a building at 218 St Georges Terrace, Perth.

The one-line entry — “Port Management Services” — which described how Mr Palmer’s company explained to the Chinese the expenditure of $10m and $2.167m in August and September last year, was the trigger for the latest round in a series of bitter legal battles.

A number of companies that have been instructed by Mineralogy to do work over several years are likely to be included in the wide sweep because of evidence of large payments from the bank account for work that was not part of the agreement with the Chinese.

Mr Palmer has repeatedly denied the money was wrongfully siphoned from the Chinese, following calls by lawyers for Citic Pacific in the Federal Court last month for a “searching inquiry” and a “forensic accounting exercise” into the money. He has told the ABC The Australian’s reporting has been fictitious and there does not appear to be “any substance” to the claims about the $12m.

The bank account was drained of $10m on August 8 last year and $2.167m on September 2, days before Australians elected Mr Palmer as federal member for the Queensland seat of Fairfax and his Senate team that now controls the balance of power.