Covers a number of issues and topics that we are currently studying.
A report by administrators FTI Consulting into the solvency of Clive Palmer’s Queensland Nickel refinery near Townsville has recommended the company be liquidated, ahead of a creditors meeting next Friday.
The creditors will meet on April 22 to decide whether to place the company into liquidation with debts in excess of $100 million, including more than $73 million owed to around 800 employees who lost their jobs last month.
The FTI report says the business does not have enough cash to pay the workers.
With unsecured creditors likely to receive no more than 50 cents in the dollar, responsibility for some of the unpaid redundancy entitlements of workers will fall to taxpayers under a federal government scheme.
The refinery’s owner, federal MP Clive Palmer, who is already being investigated by the Australian Securities and Investments Commission (ASIC) over his role in the business, which he bought in 2009.
Palmer said he “retired” from the business in 2013, when he entered federal politics, but last night the ABC’s “Four Corners” aired allegations that Palmer acted as a “shadow director”approving all expenditure at the refinery, using a pseudonymous email account under the name “Terry Smith”.
If Palmer is found to have acted in that capacity, he becomes legally liable in the same manner as an actual director.
Palmer has denied he approved spending at the refinery as a shadow director prior to it being placed in voluntary administration in January.
One the ABC’s “Lateline” program, shortly after the “Four Corners” story, Palmer attempted to explain that he was not responsible for the current state of Queensland Nickel, which during 2014-15, donated $5.9 million to the Palmer United Party.
Queensland Nickel donated another $288,516 to the PUP in the six months to December 2015.
Four weeks ago, Palmer created a joint venture using two of his companies to take control of Queensland Nickel while it was under administration. The refinery shut and workers lost their jobs just a few days later, contrary to claims by the MP that he had “saved” the refinery for a second time.
On “Lateline” he said any expenditure he oversaw was for the joint venture.
“My role was set out in the joint venture agreement as a member of the joint venture committee to direct Queensland Nickel to make sure they complied with the terms of the agreement as a manager,” he said.
The administrator’s report also identifies potential breaches of the Corporations Act by Palmer and his nephew, Queensland Nickel managing director Clive Mensink.
“Our investigations indicate certain persons appointed as a director, or who may have acted in the capacity of a director may have contravened [several sections of the Corporations Act] as well as their fiduciary and common law duties,” the report says.
“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.”
The administrators have also honed in on payments made to Palmer-related entities, saying: “We have identified significant transactions in value and quantum entered into by QN that appear to be both uncommercial and director-related transactions. These transactions could be recovered in a liquidation scenario.”