Clive Palmer’s companies “probably” won’t pay back tens of millions to Queensland Nickel creditors due to a complex corporate structure that allows them to sidestep debts, his nephew has admitted in court.
Clive Mensink, the director of QN until it went into administration, told the Supreme Court a joint venture agreement between his uncle’s companies was constructed in a way that assets and funds could be transferred to one another, all the while leaving the debt behind.
The admission came as Mr Palmer attempted to stop QN’s administrators, FTI Consulting, from doing their job with an injunction application.
A decision was reserved on Thursday afternoon until next week.
If Mr Palmer’s bid is successful, it will block FTI Consulting from appointing receivers or “dealing” with QN’s bank accounts, effectively putting the company back into Mr Mensink’s hands.
Mr Mensink was grilled over his role in the demise of the Yabulu nickel refinery in Townsville and the joint venture agreement between QNI Metals, QNI Resources, Queensland Nickel Sales and QN amid a full day of legal argument.
He admitted QN had been stripped of all its assets, which were instead owned by parent companies QNI Resources and QNI Metals.
During a fiery cross-examination from barrister Walter Sofronoff QC, Mr Mensink said the two parent companies did not want to pay QN’s debts, that ran into tens of millions of dollars.
“They probably won’t be paid,” he said.
When asked by Mr Sofronoff whether he cared that the money would not be paid, he answered “yes”, but a short time later said: “Well, there’s nothing I can do about it”.
The court heard the parent companies did not want to transfer money to QN because they were losing a lot of money, and Mr Mensink told the court they couldn’t be forced to due to a complicated corporate structure.
He is the sole director of both those companies.
Bank records tabled as evidence showed QN lost millions from June 2014 up until December 2015.
Despite this, Mr Mensink said he was not aware of the company’s dire financial position until administrators were appointed in January this year.
He also claimed QN had the “means” to continue operating, despite being stripped of its assets and his failure to provide any plan for how the business would be managed.
Mr Palmer did not provide an affidavit to the court nor did he appear in person on Thursday.
Mr Mensink said he didn’t know where Mr Palmer was and denied accusations he was refusing to pay QN’s debts because none of his other companies had any money.
As well as seeking an injunction, Mr Palmer also wants the court to rule that FTI Consulting’s request for QNI Metals and QNI Resources to pay $200 million to QN to cover its debts, is invalid.
It is understood the lawsuit will not impact on a QN creditors meeting on Friday where they will vote on whether the company should be liquidated.