Clive Palmer’s fraud defence: I made very little profit

CLIVE  Palmer’s new legal ­defence to serious allegations of fraud and dishonesty reveals that he made very little profit.

Clive Palmer accused the Chinese yesterday of having ‘engaged in a campaign to improperly apply pressure’ on him.

CLIVE  Palmer’s new legal ­defence to serious allegations of fraud and dishonesty over about $12 million of Chinese funds ­reveals that he made very little profit by taking the cash that had been ­deposited by Beijing’s ­investment company.

The Palmer United Party leader’s defence, filed late yesterday in the Supreme Court registry in Brisbane, discloses “there is little or no prospect of such profit amounting to any substantial sum”. He said this was because “a sum of $2,167,065.60 was paid ­directly to Media Circus”, adding that it was “paid in discharge of obligations made by the Palmer United Party” to the Brisbane-based advertising agency, which handled PUP’s marketing for last year’s federal election.

“A further sum of $8,047,607.47 was paid to the Palmer United Party and/or Media Circus from the account of (Mr Palmer’s company, Cosmo Developments),” Mr Palmer’s defence states.

“There were further amounts that were also likely to have been applied towards the discharge of debt or invoices rather than the generation of profit.”

The Weekend Australian understands that these “further amounts” include: $97,348 that he paid to American Express; $233,352 that went to the World Intellectual Property Organisation; $50,000 to his company Cold Mountain Stud; and $250,000 to the resources company that employed Zhenya Wang before he became a PUP senator. The 19-page defence lodged by Mr Palmer’s legal team follows two days of a civil trial and reams of documentary evidence in which subsidiaries of the Chinese state-owned Citic Pacific accuse him of acting fraudulently and dishonestly by taking $12.167m that was meant to be used to run a remote port for iron ore exports.

The Chinese were previously told their funds were spent on “port management services”. However, legal discovery of cheques, bank account transactions, and the testimony of Mr Palmer’s staff disclosed that most of the money went to the PUP in the lead-up to the federal election in September last year.

Mr Palmer accused the Chinese yesterday of having “engaged in a campaign to improperly apply pressure” on him and his flagship company, Mineralogy, for the purpose of achieving commercial arrangements “more favourable” to China. He documented a series of meetings and disputes over the Chinese side’s non-payment of royalties for the mining of iron ore from his tenements. These disputes are the subject of separate litigation.

His legal defence said that in March this year the Chinese side made an offer to take over the tenements and other assets “worth billions of dollars for $88m” as well as “ongoing royalty”, and that the offer was repeated in late October.

“The (Chinese) offer was grossly uncommercial and made in an attempt to take advantage of the illegitimate pressure…” Mr Palmer’s defence states.

He said the Chinese side was “deliberately and persistently” pressing for a declaration that he had been fraudulent and dishonest, which he has denied, as part of a strategy to “generate publicity adverse to (him) and thereby apply pressure to him”.

The legal action by the Beijing-controlled companies seeks declarations from the Supreme Court including “that Palmer dishonestly procured or was involved in” a breach of trust, and that he knowingly assisted his company “in its dishonest and fraudulent breach of trust”.