Toothless ASIC needs to do its job

Clive Palmer’s 11th-hour bid to wrest back control of his nickel refinery has all the hallmarks of an attempt to paint lipstick on a pig.

The Australian Securities & Investments Commission — which has been lamentably missing in action as a once-powerful Queensland politician has run roughshod through corporation law, courtrooms, his employees and creditors over the past three years — must surely now seek to properly investigate the way the member for Fairfax does business.

As a result of developments late yesterday, and just as it ­appeared that his refinery near Townsville was to have been shut down, the workers have been thrown a lifeline — but with a few gnarly barnacles attached.

The ultimate owner of the refinery, Palmer, now wants to keep his beleaguered nickel business open — but with caveats.

One of the caveats is that a different company will run the joint. The other caveat is that the existing employees will work for this different company, Queensland Nickel Sales Pty Ltd.

What this means for the existing creditors is not yet clear. But nobody should be holding their breath for payment.

For the 237 staff who were made redundant in January, the liquidation of Queensland Nickel should at least provide a pathway to the money they are owed under the taxpayer-funded Federal Entitlements Guarantee scheme.

The fate of the entitlements of the still-employed 550 staff are yet to be confirmed in the new proposed structure. As they are being offered the opportunity to hang on to their jobs at the cash-and-maintenance starved refinery in a fresh debt-free entity, they should also be guaranteed their entitlements.

But with only a $23 million new loan facility, which Palmer has achieved by hocking some of his assets, there is barely enough to kick-start the refinery back into production. There is certainly not enough in the kitty to pay the entitlements of the 550 staff.

This means that if those 550 staff also lose their jobs in the event of the new entity, Queensland Nickel Sales Pty Ltd, being liquidated, the taxpayers are ­likely going to be up for an even bigger bill. Phoenixing springs to mind. Make no mistake — the refinery and all of the entities in the framework are being controlled by Palmer. He and his alter ego “Terry Smith” are pulling every string in this high-stakes game, notwithstanding his repeated claims that he is a fulltime politician and retired from business.

His new protege, James ­McDonald, and long-standing sidekick, nephew Clive Mensink, control the new company, Queensland Nickel Sales, as its ­directors on paper, but Palmer calls the shots.

It may be no coincidence that his renewed interest in the refinery comes as the nickel price has made recent gains in a global commodities rally.

However, Palmer has proven time and again that when he buys a distressed asset, as he did with the refinery when BHP effectively gave it to him in 2009, it ends up even more distressed. His management style, asset-stripping, and run-down of maintenance are disastrous.

It is time ASIC started doing its job. It should start by examining evidence and judgments in the Supreme Court cases and the arbitration documenting how Palmer helped himself to more than $20m of Chinese funds.