Clive Palmer quits flagship Mineralogy board but the problems won’t go away

CLIVE Palmer has quietly quit as a director of his flagship company Mineralogy and two other major entities.

CLIVE Palmer has quietly quit as a director of his flagship company Mineralogy and two other major entities amid a forensic financial investigation by China’s inter­national investment company into where more than $12 million of its funds went in the weeks before the federal election.

Legal experts told The Aus­tralian yesterday that Mr Palmer’s resignation from the most important company in his corporate network may not distance him from any fallout from his escalating dispute with his Chinese business partner, Citic Pacific, which has accused the resources tycoon in court documents of wrongfully spending the money.

According to documents filed with the corporate regulator and a recent update of Mr Palmer’s pecuniary interests register, he stepped down from the board Mineralogy on May 20 and from the companies behind his trouble-plagued Queensland Nickel refinery on April 5. The Queensland government last night called on the founder and leader of the Palmer United Party to make a public explanation about his resignation from his companies, where he continues to be the major shareholder. Deputy Premier Jeff Seeney, who last month relied on parliamentary privilege to describe Mr Palmer as a “crook”, said the federal parliamentarian needed to explain why he had resigned from the companies.

“Mr Palmer can’t keep brushing off the serious questions being asked about his business activities. It’s time he came clean and told the people of Australia what’s really going on,’’ Mr Seeney said.

“These are companies … at the very heart of Mr Palmer’s business empire. Is he trying to distance himself from these companies now, and if so why?

“Does this have anything to do with the serious allegations levelled against Mr Palmer in the Federal Court by his Chinese business partners?” The companies employ almost 1000 staff in Queensland and Western Australia in roles relating to Mr Palmer’s loss-making businesses from the Queensland Nickel refinery to a dinosaur park on the Sunshine Coast and golf courses at Port Douglas and the Gold Coast.

The most valuable asset, iron ore tenements in the Pilbara region of WA, has resulted in development costs of almost $10 billion by Citic Pacific and a string of bitterly fought court cases in a debacle that has raised concerns among China’s political leadership in Beijing about Mr Palmer’s conduct and the cost of doing business in Australia.

The battle between the Chinese and Mr Palmer worsened last month when Mineralogy was accused in court documents of wrongfully spending more than $12m and of having no legitimate reason to siphon the cash, $10m of which was taken from an account in August last year and a further $2.17m in September, just days before the election.

Mr Palmer’s costly election campaign saw candidates stand in every seat at a time his companies were under severe financial stress, but he has strenuously denied the allegations that Chinese money was wrongfully spent to bankroll his political career.

Documents obtained by The Australian show that the two sums that left the National Australia Bank account dwarfed all other withdrawals. Mineralogy told Citic Pacific that the funds were for “port management” expenses, but documentation to support the expenditure was not produced.

Citic Pacific, which has called for a “searching inquiry”, said Mr Palmer’s resignations would make no difference to the pursuit of the allegedly missing funds. The matters including hundreds of documents and bank statements are likely to be referred to police.

Mr Seeney said Mr Palmer’s environmental issues at the Townsville nickel refinery remained unresolved. “And what does this mean for workers in Townsville and at the Coolum resort? Are their jobs secure?” he said.

Legal experts said the move could have been made for political purposes in order to distance himself from the companies and to offer him a way to try to avoid being linked to their ongoing controversies.

One senior corporate lawyer said Mr Palmer may still be seen in the eyes of the law as a ‘’shadow director’’ due to the fact he continues to own the businesses outright and has strong links to the remaining director in charge of the companies, Clive Mensink.

Mr Mensink is Mr Palmer’s nephew and a long-serving employee of Mineralogy.

Mineralogy and the companies behind his refinery — QNI Resources and QNI Metals — have accrued significant financial losses in recent years.

Mr Palmer’s resignation from the companies would not extinguish any legal liabilities between him and the groups, experts said. Mineralogy’s most recent financial accounts disclosed a net loss of about $104m in the 12 months to June last year. Years of low nickel prices have seen QNI Resources and QNI Metals rack up “deferred tax assets’’ of almost $130m, which can be used to avoid paying tax if the businesses can return to profitability.

The latest parliamentary update of Mr Palmer’s interests also disclosed he had been given a Hermes scarf and a Hermes baby towel, bath mitt, winter hat and bib by Sarina Russo.

The items were valued at about $3000.

Mr Palmer declined to comment when contacted by The Australian yesterday.