By Paul Rickard

As much as I hate to agree with Bill Shorten, there may be something in his call for a Royal Commission into the banks because ASIC has again demonstrated that it is really not up to the job of being the financial and corporate policeman.

The collapse of Queensland Nickel Pty Ltd (QN) is another financial scandal, and after reviewing the Administrators’ Report released this week, I can only ask why ASIC wasn’t onto this much earlier.  What did it do to stop Mr Palmer and his associates from sending this company into the sinkhole?

And it’s not just ASIC that has questions to answer. The Australian media, in particular the ABC, has given  Mr Palmer a totally disproportionate amount of air time and promoted his larrikin antics, and with the exception of a couple of contributors in The Australian, failed to ask the tough questions.

The voters in the electorate of Fisher and our federal politicians who are afraid to demand that Clive resign, should also ask themselves some hard questions. Finally, the auditors of the Queensland Nickel Joint Venture, Ernst & Young, may have a little explaining to do. 

Damming findings from the Administrators

FTI Consulting says that “both Mr Palmer and Mr Mensink appear to have been reckless”. They say that Clive Palmer appears to have acted as shadow/de facto Director of Queensland Nickel (QN) at all material times from February 2012 to the date of their appointment this year. To support this, they note that:

  • Mr Palmer has been a director of QN on 3 occasions - from July 2009 to January 2013, from April 2013 to April 2014, and then for 24 days in January/February 2015;
  • He is a  signatory on 3 QN bank accounts, where he has the capacity to transact solely and independently of the other authorised signatories;
  • He is Chairman of QN’s expenditure approval process committee, and has the highest level of authority; and
  • That from May 2014, he exercised powers controlling the company’s expenditure, and dealt with company staff on day to day operational matters. 

They detail that from February 2011, approximately $224m of QN’s funds were transferred to director-related parties. Since 30 June 2012, $189.3m of related party loan balances have been forgiven by QN for the benefit of director related parties. For example, Mr Palmer’s flagship company Mineralogy, has received $122.2m from QN, and after payments the other way, the movement of assets and loan forgiveness, has allegedly benefitted by $101.5m.

Related Party Cash Movements - 1/7/10 to 18/1/16

Then there are the political donations, which according to the Administrators, amount to $21.5m to the Palmer United Party. And sponsorship fees of $4.5m to the Club de Madrid and $0.2m to the John F Kennedy Library Foundation. There is a lot more, with vintage cars, the Avica Resort complex, Cessna aircraft ……………..

The Administrators say that pursuing an insolvent trading claim against the Directors may be successful. In their opinion, QN was insolvent from at least 27 November 2015 (and possibly earlier), with the Administrators not called in until 18 January 2016. With the fall in the nickel price, management accounts reveal that the company was EBITDA negative every month since March 2015. 

Why didn’t ASIC see this coming?

If ASIC had been reading Hedley Thomas’s pieces in The Australian over the last few years as he detailed Mr. Palmer’s legal battles with Citic and others, they must have had some concerns. If they had taken note of the battle between Mr Palmer and the villa part-owners at Coolum Resort, who have allegedly been locked out and had their electricity cut off, they should have been even more concerned. And if they had looked at their own records and asked - how often is a person a director of the same company on 3 separate occasions - surely alarm bells must have sounded?

Is this yet another case of ASIC being asleep at the wheel?

The media’s role

The media in general, and the ABC in particular, deserve a good rap over the knuckles for the way it allowed itself to be manipulated by Mr Palmer for shameless self- promotion. And with the notable exception of Hedley Thomas, Steve Price and a few others, its failure to ask the hard questions.

As perhaps our national broadcaster’s most senior political interviewer/analyst, Tony Jones role in promoting Clive’s political career through soft interviews and appearances on Q&A displays atrocious judgement. And his colleague, Emma Alberici, allowed herself to be pushed off track by Mr Palmer in an interview on Monday. Yes, Emma, there is a Joint Venture and QN is the operator appointed by the Joint Venture partners  - but Mr Palmer owns the companies that make up the Joint Venture.

Unfortunately, the ABC never seems to learn. It has apparently invited Clive to be a guest on next Monday’s Q&A.

Clive must make things right

The Prime Minister’s call yesterday for Clive Palmer to "put his money up" to help workers sacked from the Queensland Nickel refinery would be a good start. The Administrators estimate that workers are owed around $73m.

But there are other creditors as well, from freight operator Aurizon through to local Townsville small businesses, who are owed $216m. Their claims also need to be addressed.

And Clive should resign from Parliament immediately.