Creditors owed more than $220 million in the collapse of Clive Palmer’s Queensland Nickel refinery voted unanimously to put the company into liquidation today.
The vote at the second creditors’ meeting in Townsville was unanimous and in line with the recommendation from a damning report into the state of the business, released a fortnight ago by the company’s administrators.
The FTI Consulting report alleged a number of breaches of the Corporations Act and director’s duties occurred prior to the collapse of Queensland Nickel. The administrators concluded that Palmer and his nephew, the company’s managing director, Clive Mensink, were “reckless in exercising their duties and powers as directors”.
The 124 page report alleged Palmer acted as a shadow director of Queensland Nickel, and that it appeared to be trading while insolvent for several weeks before it was placed into voluntary administration.
Palmer has rejected the claims made in the report.
But the decision by creditors to wind up the business gives FTI Consulting the ability to try clawing back some of the money given to Palmer-related companies before Queensland Nickel slid into voluntary administration in January. The may also begin legal action in a bid to recover funds personally from Palmer and Mensink if the business is found to have been trading while insolvent.
The administrators alleged the politician and businessman used the company as a “piggy bank”, with payments totalling some $224 million transferred out of the business, alongside millions of dollars in donations to Palmer’s political party, and only around $22 million of that money being repaid.
The Australian Tax Office is also said to be looking at $189 million in debts owned to Queensland Nickel by other Palmer-related companies, which were subsequently forgiven.
The administrators told the ATO it was hypothetically possible to freeze Palmer’s assets if they launched action over a breach of director’s duties.
Around 800 retrenched workers at the refinery are owed around $74 million in entitlements and redundancy payments and taxpayers are likely to end up footing some of the bill under the federal government’s Fair Entitlements Guarantee scheme.
Queensland’s Courier Mail reports administrator John Park said that recovering any funds was “going to be disputed, expensive and lengthy”.