Clive Palmer instructed Queensland Nickel to pay him nearly $15 million and the company spent millions more on vintage cars, according to an administrators’ report which recommends winding up the Townsville-based operation.
Three months after Queensland Nickel went into voluntary administration, FTI Consulting has handed down its report which recommends liquidating the company, which will be referred to the corporate watchdog ASIC.
FTI Consulting points to a possible breach of fiduciary and common law duties by a director or officer of the company and has criticised Mr Palmer and his nephew and former QN director Clive Mensink for being “reckless”.
Sacked workers are owed $74 million, and if creditors agree to liquidate the company at a vote later this month, the workers may only see up to 52 per cent of the money paid out.
Federal assistance, however, would be available.
Mr Mensink still claims he is owed more than $270,000 in employee entitlements, and Mr Palmer $2.66 million for “outstanding loans”.
QN money spent on cars, hotels, PUP
The report said that on November 29, 2012, Mr Palmer instructed QN to transfer $43 million out of the company to a number of entities, including nearly $15 million to himself.
It also found that between August 2012 and June 2013 QN paid for 60 vintage cars, which ended up at Mr Palmer’s Coolum resort’s Motorama Museum.
They were then sold to Mr Palmer for $5 million, but the loan forgiven in 2015.
A total of $21.5 million of the company’s money went to the Palmer United Party since 2013, causing “detriment” to QN and creditors.
In April 2010, QN also purchased the Avica Resort on the Gold Coast for $11.55 million.
While QN had intended to use it for its headquarters, it was then sold to Mr Palmer in 2013 for $7.9 million, the report said.
“Both Mr Mensink and Mr Palmer, in our view, appear to have been reckless, in exercising their duties and powers as Directors of QN,” the report said.
“Ultimately, the determination of whether the Directors have breached their duties will be made by a Court.”
Palmer ‘may have acted as shadow director’
On Monday ABC TV’s Four Corners revealed Mr Palmer approved millions of dollars in expenditure when he was not a listed director of Queensland Nickel.
Mr Palmer has denied operating as a shadow director at Queensland Nickel, which ran his Yabulu nickel refinery in Townsville before it was placed into voluntary administration.
However, the report said he appeared to have done so.
“Our observations indicate Mr Palmer, a former director of the company, appears to have acted as a shadow/de facto director of QN at all material times from February 2012 up to the date of our appointment on 18 January 2016 [excluding any tenure as appointed director],” the report said.
“Our investigations indicate certain persons appointed as a director, or whom may have acted in the capacity of a director, may have contravened sections … of the Act.
Queensland Nickel was the manager of a joint venture between two of Mr Palmer’s other businesses, QNI Metals and QNI Resources.
Immediately after Four Corners aired, Mr Palmer told Lateline he made decisions about Queensland Nickel’s expenditure as a member of the joint venture committee, which was set out in a “contractual relationship between the company and the joint venture parties”.
Prime Minister Malcolm Turnbull said the report could be the death knell for Mr Palmer’s political career as federal MP for the Sunshine Coast seat of Fairfax.
“I would say, assuming he renominates, I think the electors of Fairfax will cast a very stern judgement on him,” he said.
Palmer: Not my decision to delay entitlements
Mr Palmer said it was the administrators, not him, who decided not to pay workers’ entitlements.
“This is a great scandal, misreported in the press right across the country, that I made a decision not to pay workers’ entitlements. That is complete rubbish.”
The FTI Consulting report also appointed independent environmental consultants to evaluate the refinery.
It identified “a number of areas of current non-compliance and identified that past external environmental audits had noted 15 minor non-compliance areas, which if left unattended could evolve into major issues”.