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Clive Palmer in bid to stop fraud ruling

CLIVE Palmer’s lawyers are trying to block a judge from ruling that the resources tycoon acted dishonestly or fraudulently.

CLIVE Palmer’s lawyers are trying to block a Supreme Court judge from ruling on whether the resources tycoon acted dishonestly or fraudulently when allegedly siphoning millions of dollars of Chinese funds to his election campaign.

Yesterday, Mr Palmer’s Chinese business partners aired for the first time in open court allegations the Palmer United Party leader “invented” a backdated “sham” document to disguise his alleged dishonest misappropriation of $12.167 million.

The civil trial, in which Chinese government-owned investment conglomerate Citic Pacific is suing Mr Palmer personally over the $12.167m, began yesterday before Queensland Supreme Court judge David Jackson. Mr Palmer’s legal team revealed he would not give evidence personally, or call witnesses or tender documents in the trial. Barrister Simon Couper QC made a series of concessions on Mr Palmer’s behalf, in an attempt to stop the public examination of fraud and dishonesty allegations. Mr Couper told Justice Jackson the concessions meant the question of fraud was now irrelevant, an argument rejected by Citic.

The case could be a watershed in the years-long stoush between the partners in the massive Sino Iron project in Western Australia’s Pilbara. Mr Palmer strenuously denies any wrongdoing, and argues Citic has failed to pay his companies millions in iron ore royalties. Any judgment critical of Mr Palmer is likely to be seized on by West Australian police, who The Australian revealed this week had launched a preliminary fraud investigation into the matter.

A fortnight ago, Mr Palmer admitted in his filed defence to the Citic claim that he falsely backdated the case’s key document, the Port Management Services Agreement. The revelation was seized upon yesterday by Citic barrister Andrew Bell SC, who said it “powerfully” supported the allegation the agreement was a “sham” orchestrated by Mr Palmer to justify his “unjustifiable” funnelling of Chinese money for his own use.

Mr Palmer withdrew the $12.167m in Citic funds in August and September last year, from a “Port Palmer Operations” bank account set up to pay for the management of a West Australian port linked to the Sino Iron project. He personally wrote cheques for more than $4m to Media Circus for political advertising and funnelled $6m through his company Cosmo Developments into the PUP. Citic’s central claim is that the cash in the account, which it argues was a trust, was strictly for port-related expenses. Citic wants Justice Jackson to declare that Mr Palmer dishonestly procured a breach of trust, and to force him to pay compensation.

Mr Palmer argues there was no breach because the account was not a trust, so he could spend the money as he saw fit.

Mr Couper yesterday conceded that if Justice Jackson ruled the cash was trust money, and Mr Palmer knew it was, it would be a breach of trust. He said, if that occurred, Citic would win the right to collect compensation from Mr Palmer, without the need to delve into the fraud allegations. “The consequence of those (concessions is) that the question of fraud and dishonesty, either by (Mr Palmer’s company) Mineralogy as trustee, or by Mr Palmer, has no relevance,” Mr Couper said.

Dr Bell highlighted Mr Palmer’s failure to explain why he made the two payments, why he drafted the “sham” document and other “gaping holes” in his story. He said Mr Palmer would not explain why the two payments were wrongly described as port-related in Mineralogy’s books, when Mr Palmer conceded neither Media Circus nor Cosmo had anything to do with the port.

The resources magnate has flagged he will try to mount an “unclean hands” defence, alleging the Chinese were motivated by a desire to apply “illegitimate commercial pressure” to Mr Palmer. Justice Jackson will hear that argument at a later date. The hearing continues today.

Read related topics:Clive Palmer
Sarah Elks
Sarah ElksSenior Reporter

Sarah Elks is a senior reporter for The Australian in its Brisbane bureau, focusing on investigations into politics, business and industry. Sarah has worked for the paper for 15 years, primarily in Brisbane, but also in Sydney, and in Cairns as north Queensland correspondent. She has covered election campaigns, high-profile murder trials, and natural disasters, and was named Queensland Journalist of the Year in 2016 for a series of exclusive stories exposing the failure of Clive Palmer’s Queensland Nickel business. Sarah has been nominated for four Walkley awards.

Original URL: https://www.theaustralian.com.au/news/investigations/clive-palmer/clive-palmer-in-bid-to-stop-fraud-ruling/news-story/453fd1a718406e8f1542f0cb9c571f00